AARDVARK ABS: Moody's Assigns B2 Rating on Class A1 Extended Notes------------------------------------------------------------------Moody's Investors Service has withdrawn the short term rating on the following notes issued by Aardvark ABS CDO 2007-1:

According to Moody's, the Prime-1 ratings were assigned to the Class A1 Notes based on the existence of a put agreement provided by a Prime-1 rated third party. These notes had previously failed to remarket and, consequently, the issuer exercised the put agreement whose proceeds were used to fully redeem these notes and issued the Class A1 Extended Notes. Accordingly, Moody's has withdrawn its short-term ratings on the Class A1 Notes and issued long-term ratings of B2, on review for possible downgrade to the Class A1 Extended Notes.

ABCDS 2006-1: Moody's Chips Notes Ratings on Three Classes to Ca ----------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by ABCDS 2006-1, Ltd.:

Class Description: $200,000,000 Senior Swap Agreement with Royal Bank of Canada, London Branch (the "Senior Swap")

The downgrades reflect reduced credit enhancement due to monthly realized losses, a high amount of loans that are considered severely delinquent, and high loss severities experienced over the past 12 months. Realized losses have outpaced excess interest by approximately 5.0x over the past 12 months. As of the April 2008 remittance period, cumulative losses, as a percentage of the original pool balance, were 6.67%. Total delinquencies and severe delinquencies make up 31.05% and 17.97% of the current pool balance, respectively.

Over the past 12 months, loss severities were approximately 103%. The past three months saw loss severities totaling 117%. The high severities reflect a large number of low-value properties being liquidated in Michigan, Ohio, and Pennsylvania. Some of these properties had to be demolished due to deterioration, which caused the transactions to incur additional losses. There are similar low-value properties remaining in the delinquency pipeline. Overcollateralization has been eroded completely, and the B class is currently taking losses.

S&P placed its rating on class AII-1 on CreditWatch negative due to the poor performance of this transaction and the certificate's projected credit support relative to projected losses. S&P will evaluate and compare the date of projected defaults with the projected payoff dates, as well as the relationships between projected credit support and projected losses throughout the remaining life of this certificate, and take further negative rating action if necessary.

Subordination and excess spread provide credit support for this transaction. The collateral for this transaction consists primarily of conventional, fixed- and adjustable-rate, fully amortizing, first- and second-lien residential mortgage loans with original terms to maturity of no more than 30 years.

ABITIBIBOWATER INC: Posts $248 Million Net Loss in 2008 First Qtr.------------------------------------------------------------------AbitibiBowater Inc. reported a net loss of $248.0 million, on sales of $1.7 billion, for the first quarter ended March 31, 2008. These results compare with a net loss of $35.0 million, on sales of $772.0 million, for the first quarter of 2007, which consisted of only Bowater Incorporated results.

The company's 2008 first quarter results reflect the full quarter results for Abitibi-Consolidated Inc. and Bowater Incorporated as a combined company following their combination on Oct. 29, 2007.

First quarter 2008 special items, net of tax, consisted of: a $44.0 million gain relating to foreign currency changes, a $16.0 million gain on asset sales, a $17.00 million loss related to asset closures and severance and a $76.0 million charge related to tax adjustments. Excluding these special items, the net loss for the quarter would have been $215.0 million.

"Important progress was achieved during the first full quarter of AbitibiBowater," stated president and chief executive officer David J. Paterson. "We set out with a disciplined approach and a commitment to deliver sustainable long-term value. Our EBITDA improvement, this quarter over the fourth quarter of last year, is an important step in positioning the company as the industry's great turnaround story."

AbitibiBowater said that during the first quarter it successfully completed a series of financing transactions, totaling $1.4 billion, designed to address near-term debt maturities and general liquidity needs for its Abitibi-Consolidated subsidiary.

Strategic Review

In November 2007, AbitibiBowater announced the results of a Phase 1 comprehensive strategic review, which resulted in the removal of approximately 1 million metric tons of unprofitable newsprint and commercial printing paper capacity and 500 million board feet of wood products from the marketplace.

The Phase 1 announcement also: increased the company's annual synergy target to $375.0 million from the $250.0 million target announced at the time of the company's merger; identified $500.0 million in asset sales through the sale of the Snowflake (Arizona) newsprint mill as well as non-core assets; suspended the dividend; and committed to a further review of all aspects of the business in Eastern Canada in light of inherent competitive disadvantages. AbitibiBowater also that the announced closures were completed early in the first quarter of 2008 and other commitments are on track to be met or exceeded.

"When the merger closed, we began a strategic review of all aspects of the new company and committed to take decisive action to be a stronger, more sustainable organization," said John W. Weaver, executive chairman. "We are making good progress and are beginning to benefit from improving business conditions. AbitibiBowater remains focused on continued cost reductions, improvement of our manufacturing platform and better positioning the company in the global marketplace."

Phase 2 Update

Since November, the company has engaged in discussions with governments, employees, communities and other stakeholders to reduce operating costs, enhance the viability of several operations and improve overall competitiveness. The company said that these actions, in addition to increased market prices for company products, are improving financial results. AbitibiBowater expects improved quarter-over-quarter profitability based on stronger business fundamentals, announced price increases, operating efficiencies and synergies. Significant progress has been made; however, at this time, no paper mill closures or idlings are being announced beyond the continued indefinite idling of the Mackenzie (British Columbia) and Donnacona (Quebec) paper mills.

The company said that cooperative efforts with stakeholders have enhanced the competitiveness of various company facilities such as the woodland and sawmill operations in the Lac-Saint-Jean (Quebec) region. Collaborative outreach will continue in all of Eastern Canada in light of market conditions as well as high labor, energy and fiber costs, further exacerbated by the strong Canadian dollar. AbitibiBowater will maintain a flexible approach and may take further restructuring actions, if required.

"We will continue our collaborative approach with various stakeholders in an effort to find long-term, sustainable solutions," stated Mr. Paterson. "We are confident AbitibiBowater is taking the right steps to manage our business and set the stage for meaningful improvement in earnings, efficiencies and overall growth."

Recognizing the challenges facing the North American newsprint market, AbitibiBowater says it continues to realize success in diversifying its sales to international markets, in the more than 90 countries where its products are already sold. The company said it is committed to expanding sales in growing markets. To further the expansion of the global sales effort, the company will work with North American governments and other stakeholders to ensure needed infrastructure improvements at ports supporting operations.

The company said it will raise the bar in continued cost reduction efforts and look to increase profitability on some of its paper machine assets by considering the conversion of newsprint capacity to coated and other value-added papers over the next several years. Such conversions would be expected to generate higher returns.

Management said it expects to complete the first stage of this review by the third quarter of 2008 and is considering the possibility of manufacturing a light-weight coated product, containing recycled content. The company is confident in its ability to successfully convert a newsprint machine to a high-margin product, based in part on the Catawba (South Carolina) mill success story.

AbitibiBowater also formally announced two new product offerings, EcoLaser(TM) and Ecopaque(TM). These uncoated freesheet substitutes represent innovative solutions for the printing industry, providing environmental benefits while also reducing costs for end-users. "We will continue to support growth and diversification of our product mix while positioning the company as the wise choice for environmentally sensitive customers, offering sustainable solutions to them and their clients," stated Mr. Weaver.

In addition to removing 500 million board feet of lumber capacity through Phase I actions, the company said it has further lowered its high-cost lumber capacity through consolidations, idlings and various temporary shutdowns at sawmills. The cumulative effect of these measures has reduced AbitibiBowater's lumber capacity to nearly 50% of pre-merger levels, resulting in an avoided cost of $45 per fbm. Furthermore, production costs at operating sawmills have been reduced by 7% in the first quarter of 2008.

The company confirms that it expects to meet the asset sales target of $500.0 million by the end of 2008, having achieved sales of approximately $220.0 million to date. AbitibiBowater is targeting an additional $250.0 million in asset sales by the end of 2009. The company has launched a process for the sale of its Mokpo, South Korea paper mill, and is moving forward with additional sales including forest lands, sawmills, hydroelectric sites and other assets.

In addition, AbitibiBowater reiterates its synergy target of $375.0 million by the end of 2009. At the end of the first quarter, the company had achieved an annual run rate of approximately $180.0 million in captured synergies.

Liquidity and Capital Resources

As of March 31, 2008, the company's total liquidity was comprised of liquidity from its Abitibi and Bowater subsidiaries.As disclosed in the company's audited consolidated financial statements included in its Annual Report on Form 10-K/A for the year ended Dec. 31, 2007, the company's Abitibi subsidiary was experiencing a liquidity shortfall and facing significant near-term liquidity challenges.

As a result of these liquidity issues, the company had concluded at Dec. 31, 2007, that there was substantial doubt about Abitibi's ability to continue as a going concern. As of March 31, 2008, Abitibi had a total of $346.0 million of long-term debt maturing in 2008: $196.0 million principal amount of its 6.95% Senior Notes due April 1, 2008, and $150.0 million principal amount of its 5.25% Senior Notes due June 20, 2008. Additionally, Abitibi had revolving bank credit facilities with commitments totalling $692.0 million maturing in the fourth quarter of 2008. These amounts were successfully refinanced on April 1, 2008.

The company said that while its April 1 refinancing has alleviated the substantial doubt about Abitibi's ability to continue as a going concern, significant financial uncertainties remain for Abitibi to overcome including, but not limited to, Abitibi's ability to repay or to refinance the $350.0 million 364-day term facility due on March 30, 2009, to service the considerable debt resulting from the April 1 refinancings and to overcome their expected ongoing net losses and negative cash flows.

This senior secured term loan is guaranteed by Abitibi and secured by substantially all of Abitibi's assets. In order to address the upcoming March 30, 2009 maturity, Abitibi and AbitibiBowater will be pursuing refinancing alternatives to renew or replace the existing 364-day senior secured term loan or entering into a new bank credit agreement.

The company has also announced an asset sales program of approximately $750.0 million for AbitibiBowater, and any sales of Abitibi's assets would be expected to be used for debt reduction. Management said it continues to believe that the liquidity constraints at Abitibi will not affect the financial condition of Bowater or AbitibiBowater.

As of April 1, 2008, upon completion of the company's refinancings, Abitibi had liquidity of $185.0 million, represented by cash on hand. As of April 15, 2008, after the sale of the company's Snowflake, Arizona newsprint facility and the repayment of certain debt, the company's Abitibi subsidiary had cash on hand of $277.0 million.

At March 31, 2008 and Dec. 31, 2007, AbitibiBowater Inc. and its consolidated subsidiaries had $4.7 billion of fixed rate long-term debt and $1.2 billion and $1.0 billion, respectively, of short and long-term variable rate debt.

Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed$10.3 billion in total assets, $8.7 billion in total liabilities, and $1.6 billion in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $2.3 billion in total current assets available to pay $2.5 billion in total current liabilities.

Headquartered in Montreal, Canada, AbitibiBowater Inc. -- http://www.abitibibowater.com/ -- produces a wide range of newsprint, commercial printing papers, market pulp and wood products. AbitibiBowater owns or operates 27 pulp and paper facilities and 34 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. AbitibiBowater is also among the world's largest recyclers of newspapers and magazines. AbitibiBowater's shares trade under the stock symbol ABH on both the New York Stock Exchange and the Toronto Stock Exchange.

* * *

As reported in the Troubled Company Reporter on April 16, 2008,Standard & Poor's Ratings Services assigned recovery ratings tothe senior unsecured debt issues of AbitibiBowater Inc., Abitibi-Consolidated Inc., and Bowater Inc. At the same time, S&P loweredthe issue-level rating on these debts to 'CCC+' from 'B-'.

ACA ABS 2003-2: Moody's Slashes A1 Rating on $36MM Notes to C -------------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by ACA ABS 2003-2, Limited.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the Structured Finance securities.

ACACIA CDO: Moody's Chips Rating on $41MM Notes to B1 from A1-------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible further downgrade the ratings on these notes issued by Acacia CDO 12, Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the Structured finance securities.

ADVANTEX MARKETING: March 31 Balance Sheet Upside-Down by C$1MM---------------------------------------------------------------Advantex Marketing International Inc.'s balance sheet at March 31, 2008, showed total assets of C$10.1 million and total liabilities of C$11.1 million, resulting in a total shareholders' deficit of C$1.0 million.

The company reported results for the fiscal third quarter and nine months ended March 31, 2008.

For the three months ended March 31, the company incurred net loss of $390,000 compared with net loss of $359,000.

The net Loss for nine months ended March 31, 2008, is $1.0 million compared with $1.7 million for the corresponding period of the previous year.

For the three months ended March 31, 2008, the increase in interest expense resulted from the new debt financings and the impact from marginally lower revenues of $182,000, is a reflection of the merchant enrolling and activation process.

Based in Ontario, Canada, Advantex Marketing International Inc. (TSX:ADX) -- http://www.advantex.com/-- is a specialist in the marketing services industry, managing white-labeled rewards accelerator programs for major affinity groups through which their members earn bonus frequent flyer miles and/or other rewards on purchases at participating merchants. Under the umbrella of each program, Advantex provides merchants with marketing, customer incentives, and secured future sales through its Advance Purchase Marketing model. The company's partners include more than 700 restaurants, online retailers, golf courses, small inns and resorts, and major organizations, including CIBC, United Airlines, Delta Airlines, Alaska Airlines, and Lufthansa Airlines.

According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying portfolio and the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

ALESCO FINANCIAL: Updates on Impact of IndyMac's Deferral ---------------------------------------------------------Alesco Financial Inc., a specialty finance real estate investment trust, updates its previous announcement concerning the expected impact to the company of the deferral by IndyMac Bancorp of the interest payments due on IndyMac's trust preferred securities held in Alesco's portfolio.

Alesco Financial has completed a review of its eight collateralized debt obligation, or "CDO," transactions that include trust preferred securities issued by IndyMac. Alesco Financial holds a portion of the equity interests in these eight CDOs. IndyMac's securities represent an aggregate of 2.43% of the total pool of collateral in those eight CDOs and approximately $2.1 million in aggregate interest payments per quarter to the eight CDOs, of which Alesco Financial's proportionate share is approximately $1.5 million, or about $0.02 per diluted AFN common share per quarter.

IndyMac's deferral will trigger the failure of over-collateralization tests in five of the eight CDOs for a period of time, of which one is expected to be a partial failure that should cure in the current period. Once the failure of an over-collateralization test is triggered in a CDO, Alesco Financial will no longer receive current distributions of cash with respect to its equity interests in the CDO until sufficient cash flow is paid to senior debt holders in the CDOs to cure the over-collateralization tests. IndyMac did not disclose how long it expects to defer its payments.

Alesco Financial expects that, even if IndyMac does not resume making payment, and assuming no additional deferrals, the four affected CDOs that are not expected to cure in the current period will recommence making equity distributions within four to seven quarters. For the year ended December 31, 2007, and the quarter ended March 31, 2008, the five CDOs that Alesco Financial expects will fail over-collateralization tests contributed $32.3 million, or 38%, and $8.8 million, or 44%, respectively, of Alesco Financial's adjusted earnings for such periods. Alesco Financial's adjusted earnings will continue to include this income even though AFN will not receive corresponding cash distributions until the over-collateralization tests have been cured.

Currently, Alesco Financial has available unrestricted cash of approximately $125 million, including cash generated by previously-disclosed gains on credit default swaps.

James McEntee, President and CEO of Alesco Financial, said, "The ultimate impact of IndyMac's actions on Alesco Financial will be determined over time, based upon whether, and when, [IndyMac] commences payment on its obligations. The actions by [IndyMac] are indicative of the stress that the banking sector is under at the current time. As I have stated on recent investor calls, the stress in this sector is likely to continue to evidence itself in our portfolio for the foreseeable future. [IndyMac's] announcement is a negative development; however, we continue to believe in the health of this sector over the mid- and long term, and we expect this portfolio to perform reasonably well. The key to Alesco Financial participating in any turnaround in the banking sector is patience. We have worked diligently over the past nine months to position Alesco Financial's balance sheet in such a way as to avoid having to take precipitous action; our current liquidity is critical to being able to weather this storm. This will, however, take some time. We have the liquidity to be patient, and we have a management team focused on taking advantage of opportunities as they arise, as is evidenced most recently by the benefits garnered from the credit default swaps AFN put in place."

Alesco Financial's available unrestricted cash should be sufficient to allow Alesco Financial to maintain its first quarter 2008 dividend rate for the remainder of 2008, even after giving effect to the failure of the over-collateralization tests. The payment of future dividends is, however, subject to the review and approval of Alesco Financial's board of directors, and there can be no assurance that Alesco Financial's board will determine to maintain the first quarter dividend rate. As discussed on Alesco Financial's earnings call last week, Alesco Financial is reviewing a number of strategies for the company, including whether to continue to maintain its REIT qualification. Any change in strategy could impact the level of future dividend payments. A special committee of Alesco Financial's independent directors has been formed and has hired advisors to consider these alternatives. Management and the Board are fully committed to maximizing the realization of value for shareholders, and are actively engaged in the process of seeking to do so.

About Indymac Bancorp

Headquartered in Pasadena, California, IndyMac Bancorp Inc.(NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank thatoriginates mortgages in all 50 states of the United States. Indymac Bank provides financing for the acquisition, development,and improvement of single-family homes. Indymac also providesfinancing secured by single-family homes and other bankingproducts to facilitate consumers' personal financial goals. Thecompany facilitates the acquisition, development, and improvementof single-family homes through the electronic mortgage informationand transaction system platform that automates underwriting, risk-based pricing and rate locking via the internet at the point ofsale. Indymac Bank offers mortgage products and services that aretailored to meet the needs of both consumers and mortgageprofessionals. Indymac operates through two segments: mortgagebanking and thrift.

The Troubled Company Reporter reported on May 15, 2008, that Fitch Ratings downgraded the long-term Issuer Default Ratings (IDRs) of Indymac Bancorp Inc. (IMB) and its wholly owned bank subsidiary Indymac Bank FSB (bank). In addition, Fitch has placed the affected ratings on Rating Watch Negative. Fitch's action reflects the company's challenges in returning to profitability and decision to defer dividend payments on preferred stock issued by IMB and the bank. Approximately $19.9 billion of debt and deposits are involved in Fitch's rating action. Ratings downgraded and placed on Rating Watch Negative:

* Indymac Bancorp Inc.

-- Long-term IDR to 'B-' from 'BB'; -- Short-term IDR to 'C' from 'B'; -- Individual to 'D/E' from 'C/D'.

About Alesco Financial

Headquartered in Philadelphia, Alesco Financial Inc. (NYSE: AFN) -- http://www.alescofinancial.com/-- is a specialty finance real estate investment trust (REIT). The company is externally managed by Cohen & Company Management LLC, a subsidiary of Cohen Brothers LLC (which does business as Cohen & Company), an alternative investment management firm, which, since 2001, has provided financing to small and mid-sized companies in financial services, real estate and other sectors.

BLUE HERON: Moody's Slashes Rating on $1.113BB Notes to 'Baa1'--------------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Blue Heron Funding VI, Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

BLUEGREEN CORP: Moody's Rates $20MM Line of Credit Caa1 -------------------------------------------------------Moody's assigned a Caa1 rating to Bluegreen Corporation's$20 million senior unsecured line of credit. Additionally, the ratings outlook was revised to negative from stable. Concurrently, Moody's affirmed the company's B2 Corporate Family Rating and B2 Probability of Default Rating.

The revision of Bluegreen's ratings outlook to negative from stable reflects Moody's expectations of lower operating performance over the intermediate term driven by the general economic slowdown coupled with the sustained elevated fuel prices. With properties that are within driving distances of major metropolitan areas, the increased gas prices could result in lower visitation to the company's properties. Additionally, the credit markets could hamper the company's ability to raise financing in order to continue its resort development activity.

The B2 Corporate Family Rating reflects the company's highly leveraged position, significant dependence on third party financing, high default rate of customer loan receivables, exposure to real estate development risk, and significant competition within the timeshare segment. The Corporate Family Rating also considers the drive-to nature of Bluegreen's resort properties, adequate liquidity and stable operating performance.

Bluegreen has experienced some deterioration in its receivables portfolio with the average annual default rate for the vacation ownership interval receivables increasing to 7.9% for the twelve months ended March 31, 2008. Additionally, approximately 31% of the company's receivables portfolio had FICO scores below 620.

These rating was assigned:

-- Caa1 (LGD5/83%) rating on $20 million Senior Unsecured Line of Credit.

Headquartered in Boca Raton, Florida, Bluegreen Corporation is a leading acquirer, developer and marketer of vacation ownership interests in resorts as well as residential and homesites. For the twelve months ended March 31, 2008, the company generated approximately $684.2 million in revenues.

In his decision, Justice Colin Campbell found that the Plan represents a laudable business solution. He held that the statement provided in the Plan, insofar as it would bar claims against third parties for negligence relating to ABCP, may well be appropriate under the CCAA.

However, to the extent the statement could extend to fraud claims, he adjourned the matter for further submissions as to whether the Plan can be approved and, in particular, whether there could be a process within the CCAA to deal with legitimate, specific and particularized claims of noteholders for fraud, if any, against various parties in connection with ABCP.

Judge Campbell stated that, if the parties can agree on a dispute resolution process within the ambit of the CCAA to deal with serious claims of fraud, the Plan can go forward immediately. He directed the parties to return to report on the proposals, if any, for resolving potential claims in fraud by no later than May 30, 2008.

The judge also asked that a hardship consideration process to deal with the special circumstances, including "some elderly individuals and families holding through corporations their entire family savings," be considered by the Committee and reported on to the Court.

"We look forward to working with the Monitor and other stakeholders to see if a process can be developed that meets the concerns raised by the Court so that the Plan may be sanctioned and implemented as soon as possible for the benefit of all noteholders," Purdy Crawford, chair of the Investors Committee, said.

As reported by the Troubled Company Reporter on March 18, 2008,Justice Colin Campbell of the Ontario Superior Court of Justicegranted an application filed on March 17 by The Pan-CanadianInvestors Committee for Third-Party Structured ABCP under theprovisions of the Companies' Creditors Arrangement Act. TheCommittee asked the Court to call a meeting of ABCP noteholders tovote on a plan to restructure 20 trusts affecting $32 billion ofnotes. The trusts were covered by the Montreal Accord, anagreement entered by international banks and institutionalinvestors on Aug. 16, 2007 to work out a solution for the ABCPcrisis in Canada. Justice Campbell appointed Ernst & Young, Inc.,as the Applicants' monitor, on March 17, 2008.

CANARGO ENERGY: Posts $1.2 Million Net Loss in 2008 First Quarter-----------------------------------------------------------------Canargo Energy Corp. reported a net loss of $1.2 million for the first quarter ended March 31, 2008, compared with a net loss of $5.9 million in the same period in 2007. Results for the three months ended March 31, 2007, included a net loss, net of taxes and minority interest, of $1.8 million associated with the discontinued operations of Tethys Petroleum Limited.

The company recorded operating revenue from continuing operations of $2.6 million during the three month period ended March 31, 2008, compared with $446,847 for the three month period ended March 31, 2007. This increase is attributable to higher sales volumes and higher average net sales prices achieved from the Ninotsminda Field in the first quarter of 2008. Ninotsminda Oil Company Limited sold 27,078 barrels of oil for the three month period ended March 31, 2008, compared to 7,508 barrels of oil for the three month period ended March 31, 2007.

For the three month period ended March 31, 2008, NOC's net share of the 39,143 barrels (430 barrels per day) of gross oil production for sale from the Ninotsminda Field in the period amounted to 25,443 barrels (280 barrels per day). In the period, 1,635 barrels of oil was sold from storage. For the three month period ended March 31, 2007, NOC's net share of the 43,881 barrels (488 barrels per day) of gross oil production was 30,898 barrels (343 barrels per day).

The operating loss from continuing operations for the three month period ended March 31, 2008, amounted to $228,001 compared with an operating loss of $1,954,863 for the three month period ended March 31, 2007. The decrease in operating loss is attributable to increased operating revenues and decreased selling, general and administration costs partially offset by increased field operating expenses, direct project costs and increased depreciation, depletion and amortization in the period.

Other expense decreased to $957,086 for the three month period ended March 31, 2008, from from $2,136,539 for the three month period ended March 31, 2007. The decrease in other expense is primarily a result of lower loan interest payable and amortised debt discount for the three month period ended March 31, 2008, compared to the three month period ended March 31, 2007.

The loss from continuing operations of $1,185,087 for the three month period ended March 31, 2008, compares to a net loss from continuing operations of $4,091,402 for the three month period ended March 31, 2007.

Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed $59.9 million in total assets, $20.7 million in total liabilities, $2.1 million in temporary equity, and $37.1 million in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $5.9 million in total current asets available to pay $8.4 million in total current liabilities.

As reported in the Troubled Company Reporter on March 18, 2008,L J Soldinger Associates LLC exressed substantial about CanArgo Energy Corporation's ability to continue as a going concern after it audited the company's consolidated financial statements forthe year ended Dec. 31, 2007.

The auditor reported that the company has incurred netlosses since inception and does not have sufficient funds toexecute its business plan or fund operations through the end of2008.

In the three month period ended March 31, 2008, and years ended Dec. 31, 2007, and 2006, the company's revenues from operations did not cover the costs of its operations.

The company said that its ability to continue as a going concern is dependent upon raising capital through debt or equity financing on terms acceptable to the company in the immediate short-term.

If the company is unable to obtain additional funds when these are required or if the funds cannot be obtained on terms favourable to the company, it may be required to delay, scale back or eliminate its exploration, development and completion program or enter into contractual arran gements with third parties to develop or market products that thecompany would otherwise seek to develop or market itself, or even be required to relinquish its interest in its properties or in the extreme situation, cease operations altogether.

About CanArgo Energy

CanArgo Energy Corporation (AMEX: CNR) -- http://www.canargo.com/-- is an independent oil and gas exploration and production company with its oil and gas operations currently located in Georgia.

CASH SYSTEMS: March 31 Balance Sheet Upside-Down by $1.9 Million----------------------------------------------------------------Cash Systems Inc.'s consolidated balance sheet at March 31, 2008, showed $58.2 million in total assets and $60.1 million in total liabilities, resulting in a $1.9 million total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $41.9 million in total current assets available to pay $48.0 million in total current liabilities.

The company posted a net loss of $4.7 million for the first quarter ended March 31, 2008, compared with a net loss of $1.4 million in the same period a year ago.

Revenue for the quarter ended March 31, 2008, was $27.1 million compared to $25.2 million for the same period in 2007. The increase in revenue is primarily due to an increase in overall transaction volume.

Total operating expenses for the three months ended March 31, 2008, were $27.9 million compared to $25.4 million for 2007.

Interest expense increased $38.2 million, or 3.3%, to $1.2 million for the three months ended March 31, 2008, when compared to the same period last year.

The company also recorded a loss on extinguishment of debt during the three months ended March 31, 2008, in the amount of $2.6 million representing the difference between the carrying value of the First Amended and Restated Notes and Warrants and the fair market value of the Second Amended and Restated Notes and Warrants.

As reported in the Troubled Company Reporter on April 29, 2008,Virchow, Krause & Company LLP, in Minneapolis, expressed substantial doubt about Cash Systems Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. Theauditing firm pointed to the company's recurring operating losses,negative cash flows from operations, negative working capital andaccumulated deficit.

In addition, the holders of the company's Second Amended and Restated Notes have the right to require the company to redeem a portion of such notes on Oc. 10, 2008, in an amount not to exceed $12.1 million in the aggregate, and will have the right to accelerate the maturity of the outstanding balance of the Second Amended and Restated Notes upon an event of default, including following a delisting of the company's common stock from The NASDAQ Global Market.

The company anticipates that its existing capital resources will enable it to continue operations through approximately October 2008, unless prior to that date payments of certain other accrued expenses are accelerated, the company's common stock is delisted from The NASDAQ Global Market, and the company's note holders elect to accelerate the maturity of the outstanding balance of the Second and Amended and Restated Notes, or unforeseen events or circumstances arise that negatively affect the company's liquidity.

Management will need to take immediate steps to reduce operating expenses, which may include seeking concessions from customers and vendors in the meantime. If it fails to raise additional capital prior to the earlier of October 2008 and the occurrence of any of these events, the company may be forced to cease operations.

About Cash Systems

Based in Las Vegas, Cash Systems Inc. (Nasdaq: CKNN) --http://www.cashsystemsinc.com/-- is a provider of cash-access and related services to the retail and gaming industries. Cash Systems' products include its proprietary cash advance systems, ATMs and check cashing solutions.

CATHOLIC CHURCH: Fairbanks Wants Claims Bar Date Set Dec. 2-----------------------------------------------------------The Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic Bishop of Northern Alaska, asked the U.S. Bankruptcy Court for the District of Alaska to establish Dec. 2, 2008, as the time within which proofs of claim against the bankruptcy estate are to be filed.

The Diocese disclosed that it consulted with the Office of the United States Trustee for Region 18, and counsel for the Official Committee of Unsecured Creditors regarding the the appropriate Bar Date under the circumstances of the case.

With respect to claims concerning executory contracts and unexpired leases, the Diocese also asked the Court to set a bar date for those claims as the earlier of:

(i) 30 days from the date of an order rejecting the executory contract or unexpired lease; or

(ii) 30 days from the date of a plan of reorganization is confirmed.

Starting 2002, the Diocese began receiving lawsuits alleging that acts of abuse had been committed by clergy and others within the Diocese for which CBNA was liable. The claims were made by adults based upon acts that they alleged occurred as many as 30 years prior to bringing the suit. By the bankruptcy filing, there were 150 claims pending against the Diocese in the Alaska state court.

While defending the abuse cases, the defense has consumed both the Diocese's time and money. In addition, the Diocese's primary insurer has not participated in a manner that would have allowed the parties to engage in meaningful settlement negotiations and resolve the cases.

Consequently, the Diocese filed a Chapter 11 to case deal with:

-- all the cases and claimants;

-- any other claims, which have not yet been asserted against the Diocese; and

-- all of the victims in a fair, just and equitable manner, considering the Diocese's limited resources.

Susan G. Boswell, Esq., at Quarles & Brady Streich Lang, LLP, in Tucson, Arizona, contended that for the Diocese to be able to fairly compensate all victims and other creditors, and to confirm a plan of reorganization, it is necessary to determine the universe of potential claimants against the Diocese, which include:

-- secured claims of creditors;

-- unsecured claims of trade creditors, vendors and other persons or entities, who provide goods or services to the Diocese; and

-- tort claims, which are unsecured claims of persons, who contend they were abused by clergy or other persons employed by the Diocese, and who contend that the Diocese is liable under various theories.

The Tort Claims consist of claims filed by Tort Claimants, (i) who have filed suit against the Diocese, (ii) those who have come forward and informed the Diocese of potential claims, but who have not filed any legal actions, and (iii) those who have never come forward and are not presently known to the Diocese.

The Diocese desires to move expeditiously toward a resolution in the Reorganization Case for the best interests of all creditors and parties-in-interest, Ms. Boswell asserted. Accordingly, it is necessary that the universe of claims be identified as quickly as possible while at the same time ensuring that broad notice of a bar date is given.

To allow maximum recovery for proper claimants, it is important for the Diocese to have an opportunity to review the claims to evaluate whether the Diocese is the proper party against which a claim should be asserted, and the validity of the underlying claim, she said.

Proofs of Claim Form

The Diocese proposed to modify the Official Bankruptcy Form No. 10 to elicit necessary information for the resolution of the Tort Claims. The Diocese further proposed that the Claim Form for other creditors' claims be modified only slightly to clearly advise claimants that they should only use this claim form if they are asserting claims other than Tort Claims.

Ms. Boswell said that special circumstances exist because the information, which will be requested, is critical to a reasonable evaluation and analysis of the liability of the Diocese for the alleged Tort Claims.

Each proof of claim form will be designed to ensure claimants provide necessary information in a way as to allow the Diocese to determine the nature, extent and validity of the Tort Claims, while being sensitive to the special issues for the claim holders. To facilitate estimation proceedings, which might occur, and to facilitate negotiations toward a consensual plan, it is important that the Diocese and others, who are given access to the Tort Claim Form, know the basic information related to the Tort Claim as early as possible, Ms. Boswell explains.

Bar Date and Publication Notices

The Diocese proposed forms of bar date notices for both the Tort Claimants and the Non-Tort Claimants. Once the Bar Date Notices are approved by the Court, the Diocese will send the relevant proof of claim form to all creditors and others entitled to receive notice pursuant to Rule 2002(a)(7) of the Federal Rules of Bankruptcy Procedure.

To ensure that the Diocese has captured the universe of potential claimants, the Diocese also proposes to provide notice of the Bar Date through publication of a publication notice. Since the Diocese is one of the poorest in the nation, and many potential creditors may not receive a newspaper, have a computer, or have other means by which to access the Publication Notice, the Diocese has attempted to create some unconventional methods to disseminate Bar Date information, in addition to religious publications, regional and national newspapers and other Alaska-based publications.

The Publication Notice will be published three times in each of these publications:

Publication Notice will also be published twice in USA Today. The Diocese will likewise post the Notices in certain locations that are located in the extremely remote areas, but may be close to one of the parishes, including the post offices, universities, and general stores.

"[T]he Debtor is exploring publication on one or more of the Alaska native corporation publications and will supplement the publication proposal prior to the hearing on this Motion," Ms. Boswell said.

The Diocese will post the Notices on its Web site, and on parish bulletins. It will also make (i) an announcement on its radio station, KNOM, in both in English, and in Yu'pik, a native Alaskan language, and (ii) public service announcements on the Alaska Public Radio Network.

In sum, the Diocese asked the Court to (i) provide that December 2 Bar Date is appropriate under the case's circumstances, (ii) approve the proposed forms of the proofs of claim and notices, (iii) order that any creditor, who fails to timely file a proofof claim pursuant to the Bar Date, will be prohibited fromparticipating in the Reorganization Case with respect to voting on a plan of reorganization, distribution under a plan, or in any other regard, and (iv) rule that any creditor's claim, which is untimely filed, will be discharged.

CATHOLIC CHURCH: Fairbanks Wants to Hire Future Claims Rep.-----------------------------------------------------------Roman Catholic Diocese of Fairbanks in Alaska, aka Catholic Church in Alaska, asked the U.S. Bankruptcy Court for the District of Alaska to:

-- find that future tort claimants are parties-in-interest in the reorganization case; and

* take other actions, or perform other duties as the Court may authorize upon request of the Diocese or other party- in-interest.

Substantially all of the individuals who alleged that they were sexually abused by priests and others associated with the Diocese assert that the incidents occurred in rural villages during the 1950s, 1960s, 1970s or early 1980s, relates Susan G. Boswell, Esq., at Quarles & Brady Streich Lang, LLP, in Tucson, Arizona. She noted that the Catholic Bishop of Northern Alaska is not aware of any allegations of abuse occurring after the early 1980s.

There is a dispute between the Diocese of Fairbanks and the Tort Claimants as to the reach and applicability of certain provisions of Alaska law with respect to sex abuse claims, Ms. Boswell said. Among other defenses, the Diocese asserts that the Tort Claims are time-barred by the two-year statute of limitations for tort actions.

Section 09.10.065 of the Alaska Statutes eliminated the civil statute of limitations for sexual abuse claims as to perpetrators. However, the Alaska Supreme Court recently made it clear that Section 09.10.065 did not apply retrospectively. Therefore, Ms. Boswell contended, Section 09.10.065 did not have to reach the issue of whether it applies to non-perpetrators.

Tort Claimants suing other dioceses and archdioceses throughout the United States attempt to overcome the statute of limitations by asserting various factual theories that involve recent discovery of injuries resulting from childhood sexual abuse. The Diocese disputed the "discovery" allegations, and the legal validity of certain tolling theories. However, to comprehensively deal with all of the Tort Claims, including current and future claims, it is necessary to recognize the possibility of future claims, Ms. Boswell explained.

Ms. Boswell argued that the appointment of a Future Claims Representative is (i) appropriate under the circumstances of the bankruptcy case because future tort claimants may hold "claims," as defined by the Bankruptcy Code, and (ii) necessary to enable the Court to render valid and binding judgments against Future Tort Claimants by enabling them, through a duly-appointed fiduciary representative, to participate in the reorganization process.

"Although CBNA does not believe that the universe of Future Tort Claimants is significant, they should be represented," Ms. Boswell told the Court. She pointed out that the reorganization case seeks to balance the rights and needs of all prepetition creditors, including Future Tort Claimants, with the Diocese's continued ministry and mission, while taking into account its limited resources.

CATHOLIC CHURCH: Fairbanks May File Chapter 11 Plan on July 15--------------------------------------------------------------In a 12-page status report filed with the U.S. Bankruptcy Court for the District of Alaska, the Catholic Bishop of Northern Alaska disclosed that it is planning to submit a plan of reorganization on or about July 15, 2008. The Diocese said it hopes to work cooperatively with the Official Committee of Unsecured Creditors, and incorporate its constructive input into formulating the Plan.

Since the Diocese has until June 29, 2008, to exclusively file the Plan, it may seek an extension of the exclusivity periods to file the Plan, and to obtain the Plan's acceptance, said Susan G. Boswell, Esq., at Quarles & Brady Streich Lang, LLP, in Tucson, Arizona.

The Diocese is not opposed to combining the hearing on approval of the Disclosure Statement and confirmation of the Plan, Ms. Boswell said. However, given the possible issues in the case and the varying interests of parties-in-interest, she asserted that doing so at this time would be neither productive, nor would it be cost-effective.

The Diocese also believes that a mediation involving the Diocese, the Creditors Committee, and insurance carriers would be productive in bringing about a prompt and fair resolution to the case. Accordingly, the Diocese asked Judge McDonald to command the parties to begin mediation as soon as practicable.

According to the report, the Diocese anticipates certain additional proceedings in the case, which may affect the formulation of the Plan. The Diocese said that it may seek approval of a debtor-in-possession financing to help fund administrative expenses. Although DIP financing would affect the content of any plan, the Diocese does not believe that it will delay the Plan's formulation.

Ms. Boswell further related that the Creditors Committee may initiate litigation against the Diocese and the parishes seeking a judicial determination that the property, which the Diocese scheduled as held for others, is property of the bankruptcy estate that the Diocese can and should use to pay the tort claims. The Diocese, however, hopes to work constructively with the Creditors Committee to determine how much will be paid to the Tort Claimants and from what sources. She noted that the Diocese will devote resources to funding the Plan to compensate the Tort Claimants.

"As with other diocesan reorganization cases, most of the funds necessary to pay claims will come from insurance proceeds. CBNA believes that this is most cost effectively accomplished by focusing on the insurance assets and determining the extent of claims against the estate," Ms. Boswell said.

In other diocesan Chapter 11 cases, the issue on what constituted estate property were hotly litigated, and has delayed the plan process, Ms. Boswell pointed out. She told Judge McDonald to consider the cases of the Diocese of Spokane and the Archdiocese of Portland in Oregon, as compared to those of the Diocese of Tucson and the Diocese of Davenport. She reminded the Court that Fairbanks "does not have the assets to sustain these fights and still have funds to pay Tort Claimants."

The report also said that the Diocese "will strongly resist any efforts to wrestle away its avoidance powers without its consent," if ever the Creditors Committee would seek to obtain control over the Diocese's avoidance actions.

The Diocese informed the Court that the tenant on its Pilgrim Springs property has breached the lease. The Diocese believes that the property is marketable for its geo-thermal potential.

Committee Responds

"On April 16, 2008, Pope Benedict XVI addressed . . . bishops in the United States, to 'bind up the wounds caused by every breach of trust, to foster healing, to promote reconciliation and to reach out with loving concern to those so seriously wronged' by the gravely immoral behavior of the sexual abuse of minors," relates David H. Bundy, Esq., in Anchorage, Alaska. However, Mr. Bundy notes, the Diocese filed the case status report "more geared to managing its public relations than following the Pope's admonition."

If the Diocese's public relations consultants have taught it to use phrases like "fairly, justly, and equitably compensate the victims," then, the Diocese should take the next step, and remove the words "alleged" and "contend" from its pleadings, Mr. Bundy asserts. He argues that the Diocese should stop referring to survivors of childhood sexual abused as "alleged" victims.

Mr. Bundy contended that the Diocese is concerned about avoiding uncomfortable issues, and making the funding of the Plan the problem of the Creditors Committee, the Future Claims Representative, and the insurance carriers.

"The proposal to mediate insurance claims in June when the bar date will not expire until early December appears to be a not so subtle effort to avoid the full disclosure of the scope of the abuse in the Diocese," Mr. Bundy stressed out. He adds that the Diocese's promise or threat to dump insurance litigation into a post-confirmation trust, and walk away, is "tantamount to a dereliction of duty."

Mr. Bundy informed the Court that the Diocese has not provided any response to some of the Creditors Committee's document requests, which include copies of all the Diocese's statutes or laws for the last 10 years, and all documents relating to the real property transaction between the Diocese and the Jesuits.

The Creditors Committee does not intend to engage in wasteful litigation, Mr. Bundy told the Court. However, the Diocese appears adamant about filing the Plan before the proposed claims bar date, and ignore the value of the parishes and preserve all of its assets.

"Under these circumstances, the Committee will not sit idly by and allow this Diocese to shirk its fiduciary duties to the creditors, maneuver around the property issues, and preserve its assets so that it can 'swiftly' exit [C]hapter 11," Mr. Bundy said.

CATHOLIC CHURCH: Judge Closes Spokane Diocese's Bankruptcy Case ---------------------------------------------------------------Judge Patricia C. Williams of the U.S. Bankruptcy Court for the Eastern District of Washington issued a final decree on May 12, 2008, closing the bankruptcy case of the Diocese of Spokane.

Judge Williams noted that since the bankruptcy estate has been fully administered, and the deposit required by the Diocese's Plan Trust has been distributed, the Plan Trustee, Gloria Z. Nagler, Esq., will be discharged as trustee.

Spokane's Second Amended Joint Plan of Reorganization was confirmed on April 24, 2007, and was declared effective on May 31.

CATHOLIC CHURCH: Spokane's Plan Trust Has $6 Million Cash Left--------------------------------------------------------------The Diocese of Spokane's Plan Trustee, Gloria Z. Nagler, Esq., at Nagler & Associates in Seattle, Washington, filed with the U.S. Bankruptcy Court for the Eastern District of Washington semi-annual financial reports on the remaining assets of the Plan Trust.

The Plan Trustee disclosed that the Diocese's Settlement Fund had total assets of $6,391,677 as of Dec. 31, 2007. Moreover, the Settlement Fund had $6,347,138 in excess of receipts over disbursements for the period covering May 8, 2007, through Dec. 31, 2007.

C-BASS CBO: Moody's Junks Ratings on Three Note Classes-------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by C-BASS CBO XV Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

CELL THERAPEUTICS: March 31 Balance Sheet Upside-Down by $124.1MM-----------------------------------------------------------------Cell Therapeutics Inc.'s consolidated balance sheet at March 31, 2008, showed $78.6 million in total assets, $192.8 million in total liabilities, and $9.9 million in no par value preferred stock, resulting in a $124.1 million total stockholders' deficit.

At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $27.6 million in total current assets available to pay $47.9 million in total current liabilities.

Net loss attributable to common shareholders for the quarter ended March 31, 2008, which includes a one-time inducement payment of $16.2 million to convert preferred shares into common shares, totaled $54.6 million compared to $28.7 million for the comparable period in 2007.

The increase in net loss attributable to common shareholders was also due, in part, to an increase in interest expense and make-whole interest payments related to the 9% convertible senior notes and the loss recorded on the exchange of the 5.75% convertible senior subordinated and subordinated notes in 2008. This was offset by a gain on the derivative liability related to conversions of the 9% convertible senior notes. The company also had a foreign exchange loss for the quarter ended March 31, 2008, compared to a gain for the same period in 2007.

Total revenues for the quarter were $3.4 million compared to $20,000 for the first quarter of 2007. Gross product sales of Zevalin(R) (Ibritumomab Tiuxetan) reached $3.8 million in the first quarter of 2008.

Total operating expenses increased to $28.4 million for the quarter ended March 31, 2008, compared to $23.6 million for the same period in 2007 mainly as a result of increased expenses related to the creation of commercial infrastructure to support Zevalin and fees associated with capital structure advisory services.

The company had approximately $15.3 million in cash and cash equivalents, securities available-for-sale, and interest receivable as of March 31, 2008. This does not include $6.2 million in restricted cash held in escrow and net proceeds, before fees and expenses, of approximately $22.9 million from the issuance on April 30, 2008, of preferred stock, convertible notes, and warrants.

The company also expects to receive an additional $5.0 million in gross proceeds from an additional sale of securities to the purchaser of the Series E preferred stock and 13.5% convertible senior notes prior to July 4, 2008, provided adequate shares are available for issuance of such securities at that time.

"In the second quarter we expect to see the positive financial impact of our strategy to focus resources on our late-stage development products and growing Zevalin sales. With our commercial team now in place to support Zevalin, we expect revenues to continue to increase over the next few quarters," said James A. Bianco, M.D., president and chief executive officer of CTI.

"In addition, over the last two quarters, we have been successful in cleaning up our balance sheet, retiring or exchanging approximately 74.0% of current debt and preferred securities. With the majority of the investments in OPAXIO and pixantrone behind us we look forward to the review of the Marketing Authorization Application for OPAXIO and to final results of the pixantrone pivotal trial."

As reported in the Troubled Company Reporter on Apirl 4, 2008,Stonefield Josephson Inc. in Los Angeles, Calif., expressed substantial doubt about Cell Therapeutics Inc.'s ability tocontinue as a going concern after auditing company'sfinancial statements for the year ended Dec. 31, 2007.

The auditing firm reported that the company has substantial monetary liabilities in excess of monetary assets as of Dec. 31, 2007, including approximately $19.8 million of convertible subordinated notes and senior subordinated notes which mature in June 2008.

The company has incurred losses since inception and expects to generate losses from operations for at least the next couple of years primarily due to research and development costs for Zevalin, OPAXIO (paclitaxel poliglumex), pixantrone, and brostallicin.

The company said that its $15.3 million in cash and cash equivalents, securities available-for-sales, as of March 31, 2008, even with the $5.0 million additional financing from a second offering of securities to the purchaser of the Series E preferred stock and 13.5% convertible senior notes, will not sufficient to fund the company's planned operations for the next twelve months as well as repay approximately $10.7 million in principal due on its convertible subordinated and senior subordinated notes in June 2008.

About Cell Therapeutics

Headquartered in Seattle, Cell Therapeutics Inc. -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable.

CHARLES RIVER: Moody's Slices Note Ratings on Three Classes to C ----------------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Charles River CDO I, Ltd.

As reported in the Troubled Company Reporter on May 9, 2008, the company and The Charming Shoppes Full Value Committee reached an agreement to resolve the proxy contest related to the company's 2008 Annual Meeting of Shareholders. Charming Shoppes Full Value Committee, the investor group that holds an 8% stake in the Lane Bryant and Fashion Bug owner, has called for the sale of noncore assets, cost cutting and slower store expansion. Under the terms of the agreement, the company will nominate to its board of directors:

-- two of management's nominees, Dorrit J. Bern, the company's chairman, president and chief executive officer and Alan Rosskamm;

-- two of the Committee's nominees, Arnaud Ajdler and Michael C. Appel; and

-- two experienced retail executives, Richard W. Bennet III, former vice chairman of The May Department Stores Company and Michael Goldstein, former chairman and chief executive officer of Toys 'R' Us Inc.

As previously disclosed, the company and the Committee have each agreed to vote their shares in favor of these nominees and all of the proposals to be presented to shareholders at the Annual Meeting. With the addition of Messrs. Ajdler, Appel, Bennet and Goldstein, Charming Shoppes' board will be expanded to eleven directors, ten of whom will be independent.

According to a Securities and Exchange Commission filing, there were no disagreements between Ms. Strandjord and the company on any matter relating to the companys operations, policies or practices that resulted in Ms. Strandjords decision to withdraw her name for reelection or the timing of her decision. Ms. Strandjord will serve as a director until her term expires at the Annual Meeting and until her successor has been elected and qualified.

As reported in the Troubled Company Reporter on March 25, 2008,Standard & Poor's Ratings Services lowered the corporate creditrating on Charming Shoppes Inc. to 'B+' from 'BB-.' The outlookremains negative.

CHARTER COMMS: Gets Nasdaq Compliance Notice on Price Listing -------------------------------------------------------------Charter Communications, Inc. received notice from the Nasdaq Global Select Stock Market that it is compliant with the minimum price continued listing standard of the Nasdaq Global Select Stock Market. The company regained compliance when the companys Class A common stock closed at or above $1.00 for the 10 consecutive business days ending May 12, 2008.

On May 12, 2008, Charter reported first quarter earnings for the three months ended March 31, 2008. For the quarter, Charter reported revenue growth of 10.5%, revenue generating unit growth of 7.1%, and average revenue per basic customer growth of 13.4% on a pro forma basis versus the comparable period in 2007.

Headquartered in St. Louis, Missouri, Charter Communications Inc.(Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband communications company and the third-largest publicly traded cableoperator in the United States. Charter provides a full range ofadvanced broadband services, including advanced Charter DigitalCable(R) video entertainment programming, Charter High-Speed(R)Internet access, and Charter Telephone(R). Charter Business(TM)similarly provides broadband communications solutions to businessorganizations, such as business-to-business Internet access, datanetworking, video and music entertainment services, and businesstelephone. Charter's advertising sales and production servicesare sold under the Charter Media(R) brand.

* * *

As reported in the Troubled Company Reporter on March 14, 2008,Moody's Investors Service affirmed these ratings for CharterCommunications Inc.: (i) corporate family rating: Caa1; (ii)probability-of-default rating: Caa2; and (iii) senior unsecurednotes: Ca (LGD5 -- 87%).

Possible Bankruptcy

As reported in the Troubled Company Reporter on May 14, 2008, the company said that if, at any time, additional capital or borrowing capacity is required beyond amounts internally generated or available under the company's credit facilities, it would consider issuing equity, issuing convertible debt or some other securities, further reducing the company's expenses and capital expenditures, selling assets, or requesting waivers or amendments with respect to the company's credit facilities.

If the above strategies were not successful, the company says itcould be forced to restructure its obligations or seek protectionunder the bankruptcy laws.

CHASE FUNDING: S&P Junks Rating on Class IB Certificates--------------------------------------------------------Standard & Poor's Ratings Services lowered its ratings on four classes of mortgage loan asset-backed certificates from Chase Funding Loan Acquisition Trust Series 2001-C2 and Chase Funding Trust Series 2002-1. S&P removed two of the lowered ratings from CreditWatch with negative implications. In addition, S&P affirmed its rating on class IIM-2 from Chase Funding Trust Series 2003-1 and removed it from CreditWatch negative. Concurrently, S&P affirmed its ratings on 18 classes from these series.

The downgrades reflect collateral performance that has eroded available credit support during recent months. As of the April 2008 remittance period, cumulative losses were 3.34% for series 2001-C2; for series 2002-1, cumulative losses were 1.19% and 1.90% for loan groups 1 and 2, respectively. Serious delinquencies (90-plus days, foreclosures, and REOs) were $4.83 million for series 2001-C2 and $2.64 million and $3.35 million for loan groups I and II, respectively, from series 2002-1. The current overcollateralization for both deals is below its target.

The affirmations reflect stable collateral performance as of the April 2008 remittance period. Current and projected credit support percentages are sufficient to support the ratings at their current levels. Serious delinquencies for loan groups 1 and 2 from series 2003-1 are $2.944 million and $5.303 million, respectively. O/C for both loan groups from series 2003-1 is close to the target levels at $1.604 million and $2.344 million, respectively.

Subordination, O/C, and excess spread provide credit support for these series. In addition, the IA-5 class from series 2003-1 is bond-insured by MBIA Insurance Corp. (AAA/Negative/-- financial strength rating). The loan pool consists of conventional, adjustable- and fixed-rate mortgage loans secured by first liens on one- to four-family residential properties.

CHRISTAL DISTRIBUTION: Seeks Protection from Creditors Under CCAA-----------------------------------------------------------------Christal Films Distribution obtained creditor protection under the Companies' Creditors Arrangement Act (Canada) from the Quebec Superior Court. The issued order seeks to protect Christal Films Distribution from its creditors and allows the restructuring of its activities. The order will be in force for a 30-day period.

In the past months, the company said it undertook many efforts to reorganize the business, which was confronted by financial difficulty. Christal Films Distribution decided that a CCAA filing is the best alternative in the interests of the company, its employees, customers, creditors and other stakeholders.

By virtue of the order issued by Justice Robert Mongeon of the Superior Court of Quebec, Raymond Chabot Inc. is the court appointed Monitor for the CCAA proceedings and will monitor Christal Films Distribution's ongoing operations, assist with the development and filing of a plan of arrangement with its creditors and other stakeholders, liaise with creditors, customers and other stakeholders and report to the Court.

The Difficult Context of Film Distribution

"[The] order is the result of the prevailing challenges facing the film distribution industry. Domestic and international markets are affected by the many changes within the film industry. Due to these circumstances, profit margins are becoming more limited," says Bertrand Langlois, Vice-President Finance at Christal Films Distribution. In this context, Christal Films Distribution claimed it has taken all the necessary measure in order to find and propose solutions to all stakeholders.

The CCAA protection stays creditors, suppliers and others from enforcing any rights against Christal Films Distribution and Christal Films Distribution will use the opportunity to restructure its affairs. Christal Films Distribution will continue operations in the ordinary course during the CCAA proceedings.

Christal Films Production Inc., the Debtor said, is not party tothe legal proceedings.

About Christal Films Distribution

Christal Films Distribution Inc. is a Canadian company focused on the distribution and broadcast of feature films in all media, including theatre, DVD and television. Founded in 2001, Christal Films Distribution is headquartered in Montreal.

DAVENPORT CDO: Moody's Slices Ratings on Three Classes to Caa3 --------------------------------------------------------------Moody's Investors Service has downgraded the rating on the following notes issued by Davenport CDO I, Ltd.:

Class Description: CP Notes

-- Prior Rating: P-2 -- Current Rating: NP

Moody's also announced that it has downgraded and left on review for further possible downgrade the ratings on these notes:

The rating downgrades taken today reflect the increased deterioration of the credit quality and the loss of over collateralization of the collateral pool comprised of collateralized debt obligations. The Senior Principal Coverage Test as reported by the Trustee on April 8, 2008, was 66.36% with the covenant for this test being 103.0%. The Coverage Test failure reflects the ongoing deterioration of the underlying portfolio that includes a number of CDOs that are currently in event of default.

In addition, the credit deterioration of the underlying portfolio has increased the likelihood of payment default on the CP Notes and it has also increased the likelihood that the Put will not be available if it is required. These factors result in a level of risk to the CP notes that is no longer consistent with a Prime rating.

DELPHI CORP: WTC Balks at $750 Million Intercompany Loan Transfer-----------------------------------------------------------------Wilmington Trust Company objects to the request of Delphi Corp. and its debtor-affiliates to authorize Delphi Automotive Systems Holdings, Inc., to grant Delphi Automotive Systems, LLC, additional intercompany loans of up to $750 million and to provide adequate protection to the Pension Benefit Guarantee Corporation in connection the transfers.

WTC is the indenture trustee for the senior notes and debentures in the aggregate principal amount of $2 billion issued by the Debtors.

WTC notes that, under the proposed transactions, DASHI -- a solvent debtor entity, 87% of which is indirectly owned by Delphi -- will make an additional loan of up to $750,000,000 to DAS and would adequate protection to the PBGC in connection therewith.

According to Edward M. Fox, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, in New York, WTC wants to take discovery from the Debtors to determine why DASHI and the Delphi believe the proposed transactions are in the best interest of their creditors and equity holders.

Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) --http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems andmodules, and other electronic technology. The company'stechnology and products are present in more than 75 millionvehicles on the road worldwide. Delphi has regional headquartersin Japan, Brazil and France.

The Court approved Delphi's First Amended Joint DisclosureStatement and related solicitation procedures for the solicitationof votes on the First Amended Plan on Dec. 20, 2007. The Courtconfirmed the Debtors' First Amended Plan on Jan. 25, 2008.

DORADO BECKVILLE: May Use Cash Collateral on Interim Basis----------------------------------------------------------Dorado Beckville Partners LP and Dorado Operating Inc. obtained permission from the U.S. Bankruptcy Court for the Northern District of Texas to use their lenders' cash collateral.

Beckville had related that it needed immediate interim authorization to use revenues associated with Beckville's working interests in Beckville Wells to pay its ordinary and necessary operating expenses. These revenues, Beckville said, constitute alleged "cash collateral" and its usage is subject to limits imposed by a budget, and necessary to maintain its business.

Beckville's Prepetition Credit Facility

Beckville is a borrower under a credit facility dated Aug. 9, 2006, signed with DB Zwirn Special Opportunities Fund LP, as administrative agent and lender and Drawbridge Special Opportunities Fund LP, as lender.

Pursuant to the credit agreement, the lenders were obligated to provide Beckville with a revolving credit facility in an aggregate amount of $25,000,000 maturing Aug. 9, 2009. To secure its obligations, Beckville granted liens and security interests in its assets to the lenders.

As of the bankruptcy filing, Beckville owes its lenders about $15,301,650 in unpaid principal and $273,729 in accrued and unpaid interest. The value of Beckville's Panola County wells is at least $10,400,000. The value of its Rusk County wells is at least $14,300,000, of which over $9,738,000 is unencumbered.

Obligation to Dorado Operating

As of the bankruptcy filing, Beckville owes Dorado Operating an aggregate amount of $8,500,000 under joint operating agreements. Dorado Operating Inc. and Beckville signed various joint operating agreements, under which the costs of maintaining, operating, drilling, and completing the Beckville wells are borne by each working interest owner on a pro-rata basis assessed on a monthly basis.

To secure payment of these costs, Dorado Operating was granted security interests and liens in some Beckville property. These liens secure Beckville's portion of joint interest billings attributable to operations on the Beckville Wells.

The DB Zwirn lenders and Dorado Operating have interest claims in the revenue associated with Beckville's working interest in the Wells. In its request to use lenders' cash collateral, Beckville said that it doesn't have sufficient time to determine validity of the claims and liens in its assets.

About Dorado Beckville

Dallas, Texas-based Dorado Beckville Partners I LP and Dorado Operating Inc. -- http://www.doradoexploration.com/-- are diversified oil and gas exploration and production companies active in the East Texas Basin, the inland waters of South Louisiana, and Western Alabama.

Beckville owns 64% to 75% of the working interest in each owned gas unit. The properties owned by Beckville are operated by Dorado Operating, a 99% limited partner of Beckville and a wholly owned unit of Dorado Exploration Inc.

DORADO BECKVILLE: Various Parties Oppose Use of Cash Collateral---------------------------------------------------------------In separate filings with the U.S. Bankruptcy Court for the Northern District of Texas, various parties in the bankruptcy case of Dorado Beckville Partners LP, filed objections to Beckville's use of lenders' cash collateral.

A. Holders of Working or Overriding Royalty Interests

Some holders of working interests or overriding royalty interests in some gas properties operated by Dorado Operating Inc. object to the Beckville and Dorado Operating Inc.'s motion to use lenders' cash collateral.

The Debtor is the operator of three wells in Rusk County, Texas, the Griffith Well, the Crim Well, and the Mims Well.

The holders pointed to the Debtor's claim that its bank accounts and accounts receivable "are held free and clear of any third party lienholders or claimants." The holders added that the Debtor proposes that the Court should authorize its use of the cash without any adequate protection to any party so the Debtor can meet its current requirements.

b. WIN Holders -- some of the interest holders held the working interests in each of the Wells pre-petition and, on assigning a portion of those working interests to Dorado Beckville, retained a portion of the working interests for themselves. Specifically, (i) PCI Drilling LP; (ii) Petroven Inc.; (iii) Bahlburg Exploration Inc.; (iv) CSC Energy Corporation; and (v) Prizm Properties LLC, together, the Mims/Crims WIN Holders, retained a portion of the working interest in the Mims Well and the Crim Well. Similarly, (a) PCI Drilling LP; (b) Walters Family Investments LLC; (c) Mercer Resources, LLC; (d) Magnew Resources, LLC; (e) and Egret Investments, together, the Griffith WIN Holders and, together with the "Mims/Crim WIN Holders", retained a portion of the working interest in the Griffith Well.

According to the ORI and WIN holders, the Debtor has failed to make royalty payments due to the ORI, WIN holders from the prepetition sales of the Wells' production that the Debtor currently holds. The interest holders claimed perfected liens against the cash proceeds of the Wells' production and no act perfect the liends is required.

In addition, the interest holders' liens extend still further. They said that the funds in co-mingled accounts are now subject to the interest holders' liens, up to the amount owed to them.

The interest holders asserted that for the Debtor to hold or use proceeds of the interest holders' share of the Wells' production would constitute conversion. Hence, the Court should not authorize the Debtor to convert the interest holders' cash.

DB Zwirn Special Opportunities Fund LP, administrative agent and lender, and Special Opportunities Fund LP, lender, with Petrobridge Investment Management LLC, sole lead arranger and sub-agent, filed with the Court a response to the Debtor's request to use cash collateral.

DB Zwirn lenders told the Court that they are aggrieved not only by the Debtor's unexplained inability to repay its debts but also by the numerous prepetition failures and unwarranted attacks of the Debtor. The lenders demand adequate protection of their liens, security interests, and other interests in cash collateral and other properties of the estate.

Pursuant to a credit agreement dated Aug. 9, 2006, DB Zwirn lenders said they initially agreed to make loans for specified purposes aggregating $4,141,000, and subsequent loans up to an additional amount of $20,858,060, or $25,000,000 in possible maximum amount. The loans were to be used to fund all or a portion of Beckville's acquisition and development of oil and gas properties, among others.

Interest was payable on the last day of each month on the aggregate principal advanced at 12% per annum, and payable on demand at 14% upon an event of default.

Among the conditions precedent to the intial commitment was an entry of Beckville and its affiliate, Dorado Operating, into a contract operating agreement dated Aug. 9, 2006.

In view of the unsatisfactory performance of the wells, drilling costs overruns, failure of the Debtor to satisfy precedent conditions, and the existence of an event of default, on March 7, 2007, DB Zwirn lenders notified the Debtor that the lenders would not agree further requests for additional subsequent commitment increases under the credit agreement.

DB Zwirn related that the Debtor continued its drilling program even after receiving notice from them. When asked about how this development activity was being paid for, the Debtor continually explained it was raising sufficient capital through equity raises. Clearly, the lenders asserted, this was not the case, considering the amount of unpaid vendor claims at the bankruptcy filing date.

DB Zwirn lenders also said that the Debtor rarely and untimely filed disbursement requests. In addition, the Debtor on Dec. 13, 2007, launched unjustified litigation in state courts against them. Since then, the lenders told the Court that the Debtor has continued its course to harass them and other lockbox payees and to attempt to delay solution to the Debtor's financial situation, enriching equity owners and the management of Beckville. The lenders also said that the Debtor committed other egregious acts. In January 2008, the Debtor transferred significant assets to an affiliate -- its primary equity security holders, Dorado Exploration Inc. -- in a blatant attempt to hinder, delay or defraud lenders and other creditors. The lenders alleged that the Debtor has further continued to defame and spread false information regarding DB Zwirn and Petrobridge related to an investigation by the Panola County District Attorney. According to the lenders, the Debtor issued public statements saying, "There is a nationwide and worldwide conspiracy by Petrobridge [and] Zwirn to defraud their borrowers."

As of the bankruptcy filing, DB Zwirn lenders said that the Debtor owes them at least $15,752,125, plus fees and other costs, and a $4,000,000 exit fee, as well as a $25,000 administrative fee to Petrobridge.

Rowoil Inc., holder of overriding royalty interests in certain oila and gas properties operated by Dorado Operating Inc., filed a joinder in objection of certain working or overriding royalty interest holders to the Debtor's request for authority to use lenders' cash collateral.

a. Schlumberger Liens -- Schlumberger has a secured claim of $278,432, plus interest and fees, representing unpaid amounts due on a trade account. The claim is secured by various mineral interests filed on October 2007.

The total mechanic and materials lien debt is $3,255,084, exclusive of interest and fees.

The mechanic and materials lien holders told the Court that they oppose to the Debtor's use of cash collateral asserting that, among others, their security is being impaired by draining of the oil and gas leases upon which their liens are attached. The lien holders asserted that the value of their liens diminish daiy as wells are produced.

The mechanic and materials lien holders mentioned are not the only creditors that have filed liens. Review on the real property records of Rusk County showed that 21 liens in excess of $2,000,000 have been filed by 14 creditors.

A review on the records of Panola County showed that 47 liens in the amount of $3,100,000 have been field by 19 creditors.

According to the filing made by the mechanic and materials lien holders, it is possible that additional liens will be filed.

Prepetition Debt Obligations

Beckville had related that it needed immediate interim authorization to use revenues associated with Beckville's working interests in Beckville Wells to pay its ordinary and necessary operating expenses. These revenues, Beckville said, constitute alleged "cash collateral" and its usage is subject to limits imposed by a budget, and necessary to maintain its business.

A. DB Zwirn Lenders

Beckville is a borrower under a $25 million revolving credit facility dated Aug. 9, 2006, signed with DB Zwirn and Drawbridge. As of the bankruptcy filing, Beckville owes its lenders about $15,301,650 in unpaid principal and $273,729 in accrued and unpaid interest. The value of Beckville's Panola County wells is at least $10,400,000. The value of its Rusk County wells is at least $14,300,000, of which over $9,738,000 is unencumbered, the Debtor's petition showed.

B. Dorado Operating

As of the bankruptcy filing, Beckville owes Dorado Operating Inc. an aggregate amount of $8,500,000 under joint operating agreements. Dorado Operating Inc. and Beckville signed various joint operating agreements, under which the costs of maintaining, operating, drilling, and completing the Beckville wells are borne by each working interest owner on a pro-rata basis assessed on a monthly basis.

A separate story on Beckville interim authority to use lenders' cash collateral is in today's Troubled Company Reporter.

About Dorado Beckville

Dallas, Texas-based Dorado Beckville Partners I LP and Dorado Operating Inc. -- http://www.doradoexploration.com/-- are diversified oil and gas exploration and production companies active in the East Texas Basin, the inland waters of South Louisiana, and Western Alabama.

Beckville owns 64% to 75% of the working interest in each owned gas unit. The properties owned by Beckville are operated by Dorado Operating, a 99% limited partner of Beckville and a wholly owned unit of Dorado Exploration Inc.

DORADO BECKVILLE: U.S. Trustee Forms Four-Member Creditors' Panel-----------------------------------------------------------------The United States Trustee for Region 6 appointed four creditors as members of the Official Committee of Unsecured Creditors of Dorado Beckville Partners I LP and Dorado Operating Inc.

Official creditors' committees have the right to employ legaland accounting professionals and financial advisors, at theDebtors' expense. They may investigate the Debtors' business andfinancial affairs. Importantly, official committees serve asfiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding.

About Dorado Beckville

Dallas, Texas-based Dorado Beckville Partners I LP and Dorado Operating Inc. -- http://www.doradoexploration.com/-- are diversified oil and gas exploration and production companies active in the East Texas Basin, the inland waters of South Louisiana, and Western Alabama.

Beckville owns 64% to 75% of the working interest in each owned gas unit. The properties owned by Beckville are operated by Dorado Operating, a 99% limited partner of Beckville and a wholly owned unit of Dorado Exploration Inc.

DUTCH HILL: Moody's Cuts Ratings, to Undertake Review -----------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Dutch Hill Funding II Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

EIRLES TWO: Moody's Slashes A3 Rating on Class Notes to Ba3 -----------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Eirles Two Limited Series 245:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

E*TRADE ABS: Moody's Chips Note Ratings on Two Classes to Ca ------------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by E*TRADE ABS CDO V, Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the Structured Finance securities.

E*TRADE ABS: Moody's Trims Preference Shares Rating to Ca from Ba1------------------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by E*Trade ABS CDO III, Ltd.

According to Moody's, the ratings were withdrawn because the notes were exchanged for the underlying note components.

EXUM RIDGE: Moody's Says Ba2 Rating on Notes May be Cut-------------------------------------------------------Moody's Investors Service has placed on review for possible downgrade the ratings on these notes issued by Exum Ridge CBO 2006-4, Ltd.

According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying portfolio and the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

Please refer to the press release on the Lehman Brothers ABS Enhanced LIBOR Fund issued on May 8, 2008.

EXUM RIDGE: Moody's Places Ratings Under Review for Possible Cut----------------------------------------------------------------Moody's Investors Service has placed on review for possible downgrade the ratings on these notes issued by Exum Ridge CBO 2006-2, Ltd.:

According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying portfolio and the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

EXUM RIDGE: Moody's Puts Ba2 Rating on $12MM Notes Under Review---------------------------------------------------------------Moody's Investors Service has placed on review for possible downgrade the ratings on these notes issued by Exum Ridge CBO 2006-5, Ltd.

According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying portfolio and the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying portfolio and the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying portfolio and the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying portfolio and the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

The preliminary ratings are based on information as of May 16, 2008. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings.

The preliminary ratings reflect: -- The characteristics of the pool being securitized; -- The credit enhancement in the form of subordination, cash, and excess spread that is augmented through the yield supplement overcollateralization amount;

Managers at Frontier (FRNT) want to grant workers little tonothing if the company fails. But they want to give themselves up to six months pay, the Teamster said in a statement.

"We negotiated in good faith with Frontier management even thoughthey already have the lowest labor costs of all low-costcarriers," said Matthew Fazakas, president of Teamsters Local 961. "They continually moved the goal posts for a deal. But we met every savings demand they made. Now we learn they had a secret plan to give themselves golden parachutes while workersget nothing.

"Golden parachutes for management are a deal breaker," Mr. Fazakassaid.

The union said Frontier's bankruptcy has nothing to do with laborcosts. Frontier has among the lowest labor costs in the industryand the lowest among low-cost carriers. The airline's bankruptcyresulted from a dispute with its credit card processor.

Nonetheless, Frontier employees agreed to $10.2 million in laborsavings. During negotiations, Teamster employees agreed to aperformance bonus plan for both management and line employees.

"Suddenly, on Tuesday, management sprang on us a new severanceplan that would give them pay up to six months," Mr. Fazakas said. "We would get nothing.

"We're outraged by this secret plan for a golden parachute,"Mr. Fazakas said. "They concealed this plan from us throughoutbargaining. They want us to have confidence in their plan toemerge from bankruptcy, but obviously they have no confidence init themselves."

Founded in 1903, the International Brotherhood of Teamstersrepresents 1.4 million hardworking men and women in the UnitedStates, Canada and Puerto Rico.

No Comment

Frontier spokesman Steve Snyder said negotiations are still in progress, and he can't comment on the specifics of the Teamsters' statement, reports Examiner.com.

Reduction in Management Pay

Frontier Airlines, on May 14, 2008, announced cuts in the pay of management and other work groups. Sean Menke, Frontier's Chief Executive Officer, reduced his own salary by 20%.

Sandra Arnoult of ATW Daily News says CEO Sean Menke informed employees in an internal memo that the pay cuts are needed to reduce the overall cost structure and attract new financing.

"As a point of necessity, we are going to have to reduce our labor and benefit expenses very quickly," he said. Mr. Menke added that there has been a "positive reception" from potential investors regarding Frontier's future.

"In addition, the bankruptcy proceedings and the creditors' meetings have been very smooth and absent of controversy," Mr. Menke claimed.

On May 1, pay cuts were announced for Frontier's officers, said ATW.

Published reports note that the cuts are temporary, and the concessions would last through September 2008.

Frontier, whose management is leading by example, has pledged to its employees that these painful reductions in their salaries some of which were already below market will be reversed if fuel prices and related costs return to more historical levels.

About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linkingtheir Denver, Colorado hub to 46 cities coast-to-coast, 8 citiesin Mexico, and 1 city in Canada, well as provide service fromother non-hub cities, including service from 10 non-hub cities toMexico. As of May 18, 2007 they operated 59 jets, including 49Airbus A319s and 10 Airbus A318s.

The Debtor and its debtor-affiliates filed for Chapter 11protection on April 10, 2008, (Bankr. S.D.N.Y. Case No. 08-11297through 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. Epiq Bankruptcy Solutions serves as the Debtors' notice and claims agent. The Official Committee of Unsecured Creditors is represented by Wilmer Cutler Pickering Hale and Dorr LLP.

For this reason, the Debtors seek the authority of the U.S. Bankruptcy Court for the Southern District of New York to establish and implement, on a postpetition basis, a Director and Officer Severance Plan for 65 of their current employees.

The covered employees consist of directors, senior directors, vice-presidents and other executives.

"In marked contrast to similarly situated employees at otherairlines and to the almost 5,000 non-union employees of the Debtors who are below the director level and whose severance benefits were assumed in the [Court's order approving the Debtors' first-day motion to honor prepetition employee wages and programs], the 65 employees currently at or above the director level currently have no enforceable severance benefit," Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, related.

-- compliant with the strict restrictions of Section 503(c) of the Bankruptcy Code.

"Payments under the Severance Plan are capped at $144,1805 despite the fact that this results in senior executiveshaving as little as 5 months severance (a fraction of what is typical). Moreover, because of the Severance Plan's new mitigation provisions, even the most senior executive, if severed, will likely receive substantially less than $144,180," Mr. Hubner explained.

Severance Plan Terms

Participation in the Severance Plan is limited to regular, full-time employees of the Debtors who are at the director level or above:

No. of Severance Group Description Participants Pay ----- ----------- ------------ ---------- A Frontier president, CEO, all 6 $144,180 executive vice presidents and for five to senior vice presidents, vice 10 months president and general counsel

The Severance Plan is available solely in the event of the Covered Employee's qualifying termination of employment:

(a) A Covered Employee will be eligible to receive benefits under the Severance Plan only if his or her employment is terminated without Cause or following a change in control, as defined in the Severance Plan, or for good reason, including (i) material reduction in the employee's base salary; (ii) material diminution of the employee's position, responsibilities or duties; or (iii) relocation of the employee's work location more than 50 miles from its current location;

(b) A Covered Employee will not be eligible to participate in the Severance Plan unless he or she waives all rights under any other severance arrangement to which the employee may be a party as of the effective date of the Severance Plan, including, but not limited to, rights under a prepetition offer letter, if applicable.

(c) Following a qualifying termination event, a Covered Employee will receive a severance payment that varies according to salary and employment level;

(d) Cash severance will be paid in installments -- as salary continuation rather than as a lump-sum payment;

(e) All severance will be subject to a mitigation requirement in the event the severed employee finds new employment, which commences in the ninth week for Group A employees;

(f) Following a qualifying termination event, a Covered Employee may continue any applicable medical, dental or vision care benefit covered by COBRA.

(g) A Covered Employee's receipt of Severance will be subject to the Employee's continuing compliance with the Severance Plan's confidentiality and non-solicitation provisions; and

(h) To the extent necessary to avoid the imposition of taxes, interest and penalties required by Section 409A of the Internal Revenue Code, any payment or benefit to which a Covered Employee is eligible under the Severance Plan, will be adjusted to comply with Section 409A, while maintaining the intent of the Severance Plan.

The Debtors believe the cost of the Severance Plan is modest.In a statement filed with with the Court, Watson Wyatt senior consultant Nick Bubnovich says that absent mass terminations, the Severance Plan will likely cost well under $1,500,000 in the aggregate, for all 65 Covered Employees. Even assuming mass terminations, he says, mitigation requirements would likely cause the actual cost to be between $2,200,000 to $2,700,00, assuming mitigation of 40-50%.

Mr. Bubnovich believe that the Severance Plan will act as a necessary reassurance for Frontier's employees and an important barrier against unwanted attrition.

"[Absent the Severance Plan,] Frontier's stakeholder value will be negatively impacted by distracted employees who may feel they have no choice but to consider other options and furtherattrition that Frontier's operations cannot afford," Mr. Bubnovich said.

The Severance Plan's provisions were intended to preserve liquidity for Frontier, he said.

About Frontier Airlines Inc.

Headquartered in Denver, Colorado, Frontier Airlines Inc. --http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linkingtheir Denver, Colorado hub to 46 cities coast-to-coast, 8 citiesin Mexico, and 1 city in Canada, well as provide service fromother non-hub cities, including service from 10 non-hub cities toMexico. As of May 18, 2007 they operated 59 jets, including 49Airbus A319s and 10 Airbus A318s.

The Debtor and its debtor-affiliates filed for Chapter 11protection on April 10, 2008, (Bankr. S.D.N.Y. Case No. 08-11297through 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. Epiq Bankruptcy Solutions serves as the Debtors' notice and claims agent. The Official Committee of Unsecured Creditors is represented by Wilmer Cutler Pickering Hale and Dorr LLP.

FX REAL ESTATE: Posts $25 Million Net Loss in 2008 First Quarter----------------------------------------------------------------FX Real Estate and Entertainment, Inc. reported a net loss of $25.0 million, on revenue of $485,000, for the first quarter ended March 31, 2008, compared with a net loss of $14.7 million, on revenue of $1.4 million, based on the results of operations of Metroflag, as predecessor, rather than those of FX Luxury Realty, for the three months ended March 31, 2008.

Results for the three months ended March 31, 2008, reflected $485,000 in revenue and $7.2 million in operating expenses.

Included in operating expenses is $2.5 million in license fees, representing the first quarter guaranteed annual minimum royalty payments under the license agreements with Elvis Presley Enterprises and Muhammad Ali Enterprises and $3.6 million in corporate expenses, including professional fees related to the CKX Inc. Distribution and the Option Agreement, $900,000 in non-cash compensation related to the issuance of stock options and $600,000 in shared services charges provided by CKX Inc. and Flag Luxury Properties LLC pursuant to the shared services agreement.

For the three months ended March 31, 2008, the company had $14.2 million in net interest expense.

For the three months ended March 31, 2008, the company did not record a provision for income taxes because the company has incurred taxable losses since its formation in 2007. As it has no history of generating taxable income, the company reduces any deferred tax assets by a full valuation allowance.

Liquidity and Capital Resources

The company disclosed in its Form 10-Q for the quarter ended March 31, 2008, that its current cash flow and cash on hand of $10.5 million at March 31, 2008, are not sufficient to fund its current operations or to pay obligations scheduled to come due over the ensuing six months, including the company's $475.0 million Park Central Loan, which matures on July 6, 2008.

The company generated aggregate gross proceeds of approximately $98.7 million from the rights offering and from sales under the related investment agreements, as amended, between the company and Robert F.X. Sillerman, the company's chairman and chief executive officer, and The Huff Alternative Fund L.P. and The Huff Alternative Parallel Fund L.P. The company used part of the proceeds to pay off debt. The remainder of the proceeds from the rights offering and the sales under the related investment agreements will be used to satisfy certain other obligations and working capital requirements.

Going Concern Disclaimer

Ernst & Young LLP, in New York, expressed substantial doubt about FX Real Estate and Entertainment Inc.'s ability to continue as a going concern after auditing the company's consolidated balance sheet as of Dec. 31, 2007, and the related consolidated statement of operations, stockholders' equity and cash flows for the period from May 11, 2007 to Dec. 31, 2007. The auditing firm pointed to the company's need to secure additional capital in order to pay obligations as they become due.

The company disclosed in its Form 10-Q for the three months ended March 31, 2008, that the Metroflag entities have $475.0 million in loans secured by the Park Central site that become due and payable on July 6, 2008, subject to the company's conditional right to extend the maturity date for up to two six (6) month extensions.

The company's ability to extend the loan is, however, subject to its ability to raise additional cash above and beyond the proceeds from the rights offering prior to July 6, 2008. The company said its ability to refinance the loan and the valuation of the property could be affected by the ability to effectively execute the Park Central site redevelopment plan. The company also has an obligation to pay license fees in accordance with the license agreements. If these payments are not made, the company could lose its rights under these agreements.

Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed $652.7 million in total assets, $519.1 million in total liabilities, and $133.6 million in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $93.1 million in total current assets available to pay $519.1 million in total current liabiities.

Headquartered in New York, FX Real Estate and Entertainment (Nasdaq: FXRE) owns 17.72 contiguous acres of land located at the southeast corner of Las Vegas Boulevard and Harmon Avenue in Las Vegas, Nevada, known as the Park Central site. The company intends to pursue a hotel, casino, entertainment, retail, commercial and residential development project on the Park Central site.

FXRE also has license agreements with Elvis Presley Enterprises, Inc., an 85.0% owned subsidiary of CKX Inc., and Muhammad Ali Enterprises LLC, an 80.0% owned subsidiary of CKX Inc., which allows it to use the intellectual property and certain other assets associated with Elvis Presley and Muhammad Ali in the development of its real estate and other entertainment attraction-based projects.

In addition to its interest in the Park Central Property, its plans with respect to a Graceland-based hotel, and its intention to pursue additional real estate and entertainment-based developments using the Elvis Presley and Muhammad Ali intellectual property, the company, through direct and indirect wholly owned subsidiaries, owns 1,410,363 shares of common stock of Riviera Holdings Corporation, a company that owns and operates the Riviera Hotel & Casino in Las Vegas, Nevada and the Blackhawk Casino in Blackhawk, Colorado.

GAINEY CORP: High Probability of Default Cues Moody's Rating Cut----------------------------------------------------------------Moody's Investors Service has downgraded the corporate family rating of Gainey Corporation to Caa2 from Caa1. The ratings outlook remains negative. In addition to the corporate family rating downgrade, these rating changes have occurred:

-- Probability of Default rating: to Caa3 from Caa2

-- $25 million first lien revolving credit facility and $210 million term loan: to Caa2 LGD 3, 34% from Caa1 LGD 3, 34%

The downgrades reflect an increased probability of default since the Feb. 1, 2008 amendment to the company's first lien credit facility was executed. In Moody's view Gainey's liquidity profile remains weak due to stringent conditions that were required under the February 1, 2008 amendment, while the truckload freight operating environment remains weak; these factors have contributed to the higher probability of default.

The Caa2 corporate family rating reflects Gainey's position as a modestly-sized, asset-heavy truckload operator with an operating ratio that generates a level of EBIT insufficient to cover interest. With annual revenues of about $400 million, Gainey is about one-third the size of the next larger, rated truckload company. Although the flexibility of the owned-asset model, whereby excess equipment can be sold to reduce debt, helps support the rating, this attribute does not assure a level of debt reduction sufficient to outpace earnings declines and to maintain compliance with financial covenants during cyclical troughs.

The negative outlook reflects anticipated weak near term demand for trucking services which will continue to pressure Gainey's operating performance.

Gainey Corporation, headquartered in Grand Rapids, Michigan, provides truckload transportation services, primarily through its owned fleet, throughout the continental U.S. and certain provinces of Canada.

GALLERIA CBO: Moody's Chips Ratings on Three Note Classes to Ca ---------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible further downgrade the ratings on these notes issued by Galleria CBO V (formerly Beacon Hill III)

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

GALLERIA CBO: Moody's Cuts B3 Rating on Two Note Classes to Caa1 ----------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible further downgrade the ratings on these notes issued by Galleria CBO IV (formerly Beacon Hill II)

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

HALCYON SECURITIZED: Moody's Chips $76MM Baa2 Notes Rating to Caa1 ------------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Halcyon Securitized Products Investors ABS CDO I Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

HAMILTON GARDENS: Moody's Downgrades Ratings on Six Note Classes----------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible further downgrade the ratings on these notes issued by Hamilton Gardens CDO Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

HEALTH SYSTEMS: March 31 Balance Sheet Upside Down by $1.1 Million------------------------------------------------------------------Health Systems Solutions, Inc. released financial results for the first quarter ended March 31, 2008. The Company reported total revenue of $2.95 million, compared to $1.59 million for the first quarter of 2007, an increase of $1.36 million, or 86%.

"Our strategic vision is being realized as evidenced by several new initiatives bearing fruit in the first quarter," stated Stan Vashovsky, Chairman and Chief Executive Officer of Health Systems Solutions. "We were successful on several fronts, winning new business from Philips Healthcare, our largest customer, by entering into a new agreement to provide software solutions for their global operations, as well as implementing consulting services with our newly formed Performance Advisors Group and generating revenue during the quarter. The success of HSS will be driven by our ability to meet our clients' needs with innovative solutions that leverage our unique expertise and entrepreneurial culture."

First Quarter 2008 Financial Results

Revenues were $2.95 million for the quarter ended March 31, 2008, compared to $1.59 million for the same period of 2007, an increase of $1.36 million, or 86%. The increase in revenue is primarily the result of the addition of our Technology Solutions and Consulting groups that generated $1.77 million, or 60%, of revenue.

Gross profit was $977,000 for the quarter ended March 31, 2008, compared to $360,000 for the same period of 2007, an increase of $617,000 or 171%. For the quarter ended March 31, 2008, gross margin was 33%, up from 23%, or 10 percentage points, for the first quarter of 2007. The increase in gross margin is the result of an increase in sales of higher-margin Technology Solutions services and a reduction in software amortization costs.

Research and development costs decreased $74,000, or 21%, to $284,000 for the first quarter 2008 compared to the same period in 2007. The decrease in development costs was primarily attributable to reductions in labor, consulting costs and related overhead expenses.

Selling expenses were $332,000 for the quarter ended March 31, 2008, compared to $525,000 in the first quarter 2007, a decrease of $194,000, or 37%. The decrease in selling expenses was primarily attributable to reductions in the sales force while leveraging other personnel to concentrate on acquiring larger customers.

General and administrative expenses were $1.22 million for the quarter ended March 31, 2008, compared with $440,000 for the same period of 2007, an increase of $780,000, or 178%. The increase in general and administrative expenses was primarily attributable to increased wages and other benefits related to the new management and administrative support staff.

Health Systems Solutions reported a net loss applicable to common shareholders of $979,000, or $0.13 per basic and diluted share, for the three months ended March 31, 2008 compared with a net loss applicable to common shareholders of $1.20million, or $0.19 per basic and diluted share, for the same period of 2007. The improvement in net loss of $224,000, or 19%, is the result of increased sales offset by investments in personnel and other infrastructure-related expenses and no deemed dividend recorded during the quarter.

"As we execute our strategic growth plan throughout the rest of 2008, we will focus on containing expenses, increasing margins and building the infrastructure to support a much larger company," Mr. Vashovsky concluded. "We've sacrificed short-term margins to re-invest cost savings in laying a foundation that can support sustained growth for the future. We are pleased with our top-line growth, but remain focused on our ultimate goal of generating high-margin, sustainable profitability."

As of March 31, 2008, the company had total current assets of$1.4 million and total current liabilities of $3.3 million. The company had total assets of $2.2 million and total liabilities of $3.4, resulting in total stockholders' equity deficiency of $1,195,657.

About Health Systems Solutions, Inc.

HSS (OTCBB: HSSO) is a technology and services company dedicated to bringing innovation to the health care industry. Our objective is to leverage current and next-generation technologies to offer value-added products and services which will generate improved clinical, operational and financial outcomes for our clients. The HSS portfolio of products and services extends across many segments of health care including home health care, medical staffing, acute and post-acute facilities, and telehealth/telemedicine, grouped into three segments: technology solutions, software and consulting.

HELIX BIOMEDIX: March 31 Balance Sheet Upside Down by $833,173 --------------------------------------------------------------Helix BioMedix, Inc., a developer of bioactive peptides, released financial results for the first quarter ended March 31, 2008.

For the first quarter of 2008, the company reported record revenue of approximately $240,000, compared to revenue of approximately $58,000 in the same period one year ago. Net loss for the first quarter of 2008 was approximately $1,275,000, or $(0.05) per share, compared to a net loss of approximately $812,000, or ($0.03) per share, in the same period one year ago. The increase in the net loss was primarily attributable to approximately $316,000 of interest expense and discount accretion associated with a convertible debt financing in the amount of $3 million which closed on February 14, 2008. Also included in the net loss was approximately $141,000 of changes in fair value of derivative instruments and $30,000 of unrealized loss on marketable securities.

As of March 31, 2008, the company's cash and cash equivalents was $3,165,000 compared to $462,000 as of December 31, 2007. The increase in cash was associated with the $3 million convertible debt financing. Current and non-current marketable securities were $170,000 as of March 31, 2008 compared to $700,000 as of December 31, 2007.

As of March 31, the company had $4,165,270 in total assets and $4,998,443 in total liabilities, resulting in total stockholders' deficit of $833,173.

"Our revenue for the first quarter more than doubled the revenue we recorded in the fourth quarter of 2007 and serves as evidence of the progress we have made in our efforts to commercialize our innovative bioactive peptides," stated R. Stephen Beatty, President and Chief Executive Officer of Helix BioMedix. "During the quarter, we continued to execute on our business goals and objectives, including the February close of a $3 million funding agreement that provides us with the necessary capital to support our operations throughout the remainder of the year. In addition, we also expanded our intellectual property portfolio through the recently announced issuance of a patent covering more than eighty of our proprietary peptides for use in cosmetic and skin care applications."

Mr. Beatty continued, "We have also made significant progress on our 2008 strategic initiatives. First, our anti-aging product line remains on schedule for launch in the second half of 2008. Our plan calls for the initial rollout of three to four products this year, followed by the release of eight to nine additional products in 2009. We also continue to make progress with our strategic partner, DermaVentures. DermaVentures' P.A.C. Perfect product line is currently shipping to customers and sales are expected to continue to increase throughout the remainder of the year.

"Next, as evidenced by our results in the first quarter, we have begun to generate significantly more revenue from our licensing partnerships. There are currently more than twenty-five products available in the market containing our peptides, and we expect that number to continue to grow throughout 2008."

Mr. Beatty concluded, "Finally, we are continuing our efforts to secure the funding required to move our lipohexapeptide program into clinical trials and have had a number of productive discussions with both industry and financial partners. As we have stated in the past, we believe that the clinical program represents a significant long-term opportunity for the company and our shareholders. As such, we are intently focused on initiating clinical development of our acne program before the end of the year."

About Helix BioMedix, Inc.

Helix BioMedix, Inc. (OTCBB: HXBM) -- http://www.helixbiomedix.com/-- is a biopharmaceutical company with an extensive library of diverse bioactive peptides and patents covering six distinct classes and hundreds of thousands of peptide sequences. Applications for Helix BioMedix peptides include anti-aging cosmeceutical skin care and acne treatment as well as other topical anti-infective pharmaceuticals and wound healing applications.

HOME EQUITY: S&P Lowers Ratings on 98 Certificate Classes---------------------------------------------------------Standard & Poor's Ratings Services lowered its ratings on 98 classes of certificates issued by 18 Home Equity Asset Trust transactions. S&P placed one of the lowered ratings on CreditWatch with negative implications. At the same time, S&P affirmed 108 ratings and placed 21 additional ratings on CreditWatch with negative implications.

The downgraded transactions have sizable loan amounts that are severely delinquent. As of the April 2008 remittance report, the severe delinquencies were as(series: severe delinquency amount, % of current pool balance):

Furthermore, realized losses for the transactions have been accelerating over the past year, exceeding available excess interest and reducing overcollateralization for each transaction. Average losses are as follows (series: three-, six-, 12-month average realized losses {mil.}):

In addition, class B-5 from series 2005-7 realized a principal loss of $457,110.99 during the April 2008 remittance period.

Series 2004-5, 2004-6, and 2004-8 have started to step down over the past several months, with 41-44 months of seasoning. This reduction in credit support, combined with accelerating losses and increasing severe delinquent loan amounts, indicate that credit support will continue to deteriorate going forward. The CreditWatch placements from these transactions reflect the possibility for deterioration of the subordination that provides support for these classes due to the deals' stepping down. The classes stand to lose between $5.1 million and $24.6 million in subordination over the next several months. Standard & Poor's will continue to closely monitor the performance of these classes.

If credit support for these classes is adequate to support the current ratings, S&P will affirm the ratings and remove them from CreditWatch. Conversely, if credit support continues to deteriorate to a point at which it is insufficient to maintain the current ratings, S&P will take further negative rating actions.

S&P placed its ratings on 17 classes from series 2005-5, 2005-6, 2005-7, 2005-8, and 2005-9 on CreditWatch negative. While these classes currently lack what S&P believe to be a sufficient amount of credit enhancement relative to projected losses, S&P will not take further rating actions until it have completed additional analysis on the affected classes. S&P expect to compare the date of projected defaults with the date of payment in full and evaluate the relationships between projected credit support and projected losses throughout the remaining life of the certificates.

HOME INTERIORS: U.S. Trustee Selects Seven-Member Creditor's Panel------------------------------------------------------------------William T. Neary, the U.S. Trustee of Region 6, appointed seven creditors to serve on an Official Committee of Unsecured Creditors for the Chapter 11 bankruptcy cases of Home Interiors Gifts Inc. and its debtor-affiliates.

Official creditors' committees have the right to employ legaland accounting professionals and financial advisors, at theDebtors' expense. They may investigate the Debtors' business andfinancial affairs. Importantly, official committees serve asfiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of aconsensual Chapter 11 plan -- almost always subject to the termsof strict confidentiality agreements with the Debtors and othercore parties-in-interest. If negotiations break down, theCommittee may ask the Bankruptcy Court to replace management withan independent trustee. If the Committee concludes reorganizationof the Debtor is impossible, the Committee will urge theBankruptcy Court to convert the Chapter 11 cases to a liquidationproceeding.

The ratings are based on preliminary terms and conditions. If the financing is completed as planned, S&P will affirm its 'B-' corporate credit rating on Hovnanian. However, the high level of priority debt that would result from this transaction would diminish the recovery prospects for the senior unsecured notes; therefore, S&P would lower its rating on the company's $1.5 billion senior unsecured notes to 'CCC+' from 'B-' and revise the recovery rating to '5' (indicating a 10%-30% recovery) from '4' (30%-50%). The rating on the company's $400 million senior subordinated debt would be unchanged at 'CCC' with a recovery rating of '6' if the financing for the senior secured note offering is completed. The outlook on Hovnanian would remain negative.

Proceeds from the notes will be used to repay the outstanding balance under Hovnanian's existing secured credit facility, which totals roughly $325 million, and for general corporate purposes. As part of this proposed financing, Hovnanian would amend its revolving credit facility and decrease the commitment from $900 million to $300 million, and it would receive less-restrictive covenants. The credit facility would be secured by a first lien on nearly all of the company's assets, and the new senior secured notes would be secured by a second lien on the same assets.

The potential rating actions upon the completion of what S&P expect to be a costly debt issue acknowledge that, despite the more highly leveraged company and greater interest burden that will result, the proposed transactions would also enhance the company's currently weak liquidity position; moreover, the looser bank covenants would provide greater flexibility as the company maneuvers through the difficult housing market conditions, which will remain challenging well into 2009.

S&P would consider lowering the corporate credit rating if the senior secured financing does not occur as planned, given Hovnanian's tight liquidity and its expectation that worsening housing conditions could hurt the company's ability to generate cash and drive greater impairments. This, in turn, could reduce the existing credit facility's size and availability.

HOVNANIAN ENTERPRISES: Moody's Rates $600MM Sr. Secured Notes Ba3-----------------------------------------------------------------Moody's Investors Service assigned a rating of Ba3 to the proposed new $600 million, five-year, senior secured notes of K. Hovnanian Enterprises, Inc. At the same time, Moody's affirmed the company's existing ratings, including the corporate family rating of B3, senior unsecured notes rating of Caa1, senior subordinated debt rating of Caa2, and preferred stock rating of Caa3. The speculative grade liquidity assessment was raised to SGL-2, from SGL-3. The ratings outlook remains negative.

The ratings reflect Hovnanian's ongoing losses, high debt leverage, elevated inventory levels, and cash flow generation that only recently turned positive. Support for the company's -- Current Ratings is provided by the boost to the company's liquidity and covenant compliance flexibility as a result of its recent equity offering and this new note offering, large revenue base (albeit rapidly declining), and widespread geographic, product, and price point diversification.

The negative outlook reflects Moody's expectation that the very weak macro environment -- both for the general economy and especially for the homebuilding industry -- will pressure Hovnanian's credit metrics as 2008 and 2009 unfold, with any material improvement unlikely to occur before early in the next decade.

Going forward, the ratings could be lowered if: 1) Moody's were to expect cash flow generation on a trailing 12-month basis to again turn negative in 2008 or 2009; (2) Moody's were to project the company to violate the only remaining covenant in its revised bank covenant package; 3) debt leverage increases to above 75%; or 4) liquidity were to tighten considerably. The ratings and/or outlook could stabilize if the company were to 1) generate significant amounts of positive cash flow and use the cash flow to reduce debt and/or augment liquidity; 2) reduce debt leverage to 60%; and 3) rebuild its interest coverage protection.

These rating actions were taken:

-- Rating of Ba3 assigned to the proposed new $600 million senior secured notes due 2013

HSPI DIVERSIFIED: Moody's Junks Ratings on Several Note Classes ---------------------------------------------------------------Moody's Investors Service downgraded the ratings of 10 classes of notes issued by HSPI Diversified CDO Fund II, Ltd., and left on review for possible downgrade the ratings of two of these classes of notes. The notes affected by the rating action are as:

The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on May 1, 2008, of an event of default caused by a failure of the Class A-3 Par Value Ratio to be greater than or equal to 90.0 per cent, as described in Section 5.1(g) of the Indenture dated June 14, 2007.

As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued following the default event. Because of this uncertainty, the ratings assigned to Class S Notes and Class A1 Notes remain on review for possible further action.

HUDSON FUNDING: Moody's Junks Ratings on Five Note Classes----------------------------------------------------------Moody's Investors Service has downgraded ratings of six classes of notes issued by Hudson High Grade Funding 2006-1, Ltd. and left on review for possible further downgrade ratings of one of these classes of notes. The notes affected by today's rating action are as:

The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence as reported by the Trustee on May 5, 2008 of an event of default caused by a failure of the Class A/B Overcollateralization Ratio to equal or exceed 93%, as required under Section 5.1(d) of the Indenture dated Nov. 1, 2006.

As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes.

The rating downgrades taken today reflect the increased expected loss associated with the tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued following the event of default. Because of this uncertainty, the ratings assigned to the Class A-1 Notes remain on review for possible further action.

Hudson High Grade Funding 2006-1, Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities.

ICEWEB INC: March 31 Balance Sheet Upside Down by $2.2 Million--------------------------------------------------------------IceWEB, Inc. released its financial results for the second fiscal quarter, ended March 31, 2008.

John R. Signorello, Chairman and Chief Executive Officer of IceWEB, Inc., stated, "As evidenced by a very strong start to our third fiscal quarter -- having achieved more than $2.3 million in sales in the month of April alone, the anticipated challenges we faced during the first half of this year with the integration of our INLINE acquisition appear to be giving way to positive, even robust, growth. What's more, we are very pleased that our decision to invest in the acquisition and in-house development of our own proprietary line of storage offerings and branded on-demand application services is having measurable impact on our blended gross profit margin, which continues to steadily climb."

Mr. Signorello further noted, "Managing the demand for our solutions by federal agencies and enterprise companies is proving to be our most pressing challenge at this time. Consequently, IceWEB's management team must now concentrate on perpetuating the sales momentum we've worked so hard to generate, while also strengthening our financial footing through debt refinancing."

Financial highlights for the six months ended March 31, 2008 compared to the six months ended March 31, 2007:

* Revenues decreased 4% to $8.1 million from $8.5 million.

* Sales of storage, network and security solutions to the Company's government and enterprise customers declined 11% to $7.4 million from $8.4 million.

* Due primarily to costs stemming from non-cash compensation expense and the acquisition of INLINE Corporation on December 31, 2007 and its subsequent integration into IceWEB's business platform, total operating expenses were up 113%, rising to $3.2 million from $1.5 million.

* Research and development expenses increased to $86,000 from $0 due to R&D activities related to the Company's proprietary INLINE storage products.

* Salaries, benefits and taxes increased to $2.0 million from $561,000, which included non-cash incentive compensation of $538,000 for the six months ended March 31, 2008, versus a credit for non-cash incentive stock option expense of $ 296,000 for the year-ago period, representing a net increase of $834,000 in non-cash expense. Base salary expense for the six month period ended March 31, 2008 totaled $1,150,000 as compared to $683,000 for the same three months in the prior year. $245,000 of this $467,000 increase in salaries is directly related to the acquisition of INLINE, and includes one-time bonuses to INLINE employees of $89,000.

* Marketing and selling costs were $89,000, a 48% decrease from $171,000. The decline was attributable to a decrease in web marketing, advertising and print advertising during the six months ended March 31, 2008.

* Net loss increased to $2.2 million, or $0.10 loss per basic and diluted share, compared to net income of $17,000, or $0.00 per basic and diluted share.

Financial highlights for the three months ended March 31, 2008 compared to the three months ended March 31, 2007:

* Revenues declined 34% to $3.9 million from $5.9 million. Excluding a single, extraordinarily large sale totaling $1.9 million which occurred in the second fiscal quarter of 2007, revenues remained relatively flat on a comparable quarter over quarter basis.

* IceWEB's INLINE storage solutions sales were $292,000, which compared to $0 due to the fact that IceWEB did not acquire INLINE until the end of 2007.

* Gross margin on sales increased 38% to 16.4% from 11.8%. On a subsequent quarter-over-quarter basis, gross margins rose 16% when compared to 14.2% reported for the first quarter of fiscal 2008.

* Total operating expenses rose 243% to $2.0 million from $591,000, due largely to the acquisition and integration of INLINE, which occurred on December 31, 2007, and non-cash compensation expense.

* Net loss increased to $2.2 million, or $0.10 loss per basic and diluted share, compared to net income of $17,000, or $0.00 per basic and diluted share.

* EBIDTA for the quarter totaled $(1.3) million. Excluding costs related to the acquisition of inline, non-cash compensation expense, and other one-time charges, the loss for the quarter was $(656,000).

As of March 31, 2008, the Company had $2.7 million in cash and accounts receivables; $465,000 in inventory and a working capital deficit of $3,861,000, which was due primarily to approximately $3.0 million being expended for the acquisition of INLINE Corporation. Total shareholders' deficit was $2.2 million.

About IceWEB Inc.

Headquartered in Herndon, Virginia, IceWeb Inc. (OTC: IWEB) --http://www.iceweb.com/-- is a diversified technology company. The company is a provider of hosted web-based collaborationsolutions that enable organizations to establish Internet,Intranet, and email/collaboration services with little or noup-front capital investment. The company also providesconsulting services to larger enterprise and government customersincluding network infrastructure, enterprise email/collaboration,and Internet/Intranet portal implementation and support services.The company also markets an array of information technologyservices and third party computer network hardware and software tolarge enterprise and government clients.

At Dec. 31, 2007, the company has a working capital deficit of $3,608,868 and an accumulated deficit of $14,331,873. As of March 31, 2008, the Company had a working capital deficit of $3,861,000 while total shareholders' deficit was $2.2 million.

IDLEAIRE TECHNOLOGIES: Locations Expected to Remain Open--------------------------------------------------------IdleAire locations are operating and serving customers and are expected to continue to do so, the company said Friday.

Company officials clarified that IdleAire TechnologiesCorporation has filed for Chapter 11 reorganization, not for Chapter 7 liquidation, noting there was nothing in the company's petition to the court indicating any plans for cessation of services.

IdleAire has secured a $25 million debtor-in-possession credit facility to provide funding for the company as it works through the Chapter 11 reorganization process. The Chapter 11 process will allow the company the opportunity to restructure its debt and emerge under new ownership on a more financially solid foundation.

"A Chapter 11 filing is an unfortunate action," said company officials, "but it is necessary to restructure our debt and recapitalize the company to continue to serve professional long-haul drivers and trucking fleets across the country. We expect operations will continue as we go through this process and we expect to end up financially stronger than ever."

IdleAire has 131 locations in 34 states. Last year, nearly 200,000individual long-haul drivers made 1.5 million visits to IdleAire sites, conserving over 15 million gallons of fuel and eliminating over 360 million pounds of diesel emissions, mostly carbon dioxide.

IdleAire Advanced Travel Center Electrification(R) (ATE) providesin-cab heating and air conditioning, electrical outlets and a range of communications and entertainment options to long-haul drivers at travel centers around the nation.

About IdleAire

Knoxville, Tennessee-based IdleAire Technologies Corp. -- http://www.idleaire.com/-- is a privately held corporation founded in June 2000. It manufactures and services an advanced travel center electrification system providing heating, ventilation & air conditioning, Internet and other services to truck drivers parked at rest stops. The company delivers its services to long-haul drivers through its patented Advanced Travel Center Electrification(R) system, or ATE system, comprised of an in-cab service module connected to an external heating, ventilation and air conditioning unit, or HVAC unit, mounted on a truss structure above parking spaces. It employs about 1,200 people.

The company filed chapter 11 petition on May 12, 2008 (Bankr. D. Del. Case No. 08-10960). Judge Kevin Gross presides over the case. Elihu Ezekiel Allinson, III, Esq., William A. Hazeltine, Esq., and William David Sullivan, Esq., at Sullivan Hazeltine Allinson, LLC represent the Debtor in its restructuring efforts. As of Dec. 31, 2007, the Debtor had total assets of $210,879,000 and total debts of $303,616,000.

INMAN SQUARE: Moody's Junks Ratings on Four Note Classes--------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Inman Square Funding II, Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

JACOBS ENTERTAINMENT: S&P Revises Outlook to Negative From Stable-----------------------------------------------------------------Standard & Poor's Ratings Services revised its outlook on Jacobs Entertainment Inc. to negative from stable. Ratings on the company, including the 'B' corporate credit rating, were affirmed.

"The outlook revision reflects weak operating results in the first quarter and an expectation that negative trends will continue in the near term, leading to an increase in leverage and credit measures that are no longer in line with the current rating," explained Standard & Poor's credit analyst Ariel Silverberg. "Given the company's EBITDA concentration in its Colorado properties and recent market trends (the Black Hawk/Central City market was down 9.5% in the first quarter of 2008), we expect EBITDA to continue to decline at a rate at least in the low- to mid-single digits, resulting in leverage rising to the mid- to high-6x area."

The rating on Jacobs reflects the company's high debt levels, active growth strategy, and second-tier casinos. The company's gaming operations, which include casinos, truck plazas, off-track wagering facilities, and a racetrack, are organized into four regions (Colorado, Nevada, Louisiana, and Virginia) and are categorized as: The Lodge Casino and the Gilpin Casino, both located in Black Hawk, Colorado; Gold Dust West Reno, Gold Dust West Carson City, and Gold Dust West Elko, located in Nevada; 18 truck plaza gaming facilities in Louisiana (plus a revenue share agreement related to an additional truck plaza); and a horse racing track and nine satellite wagering facilities, located in Virginia. The majority of Jacob's revenue and EBITDA stem from the Colorado casinos and truck plaza operations.

Jacobs' credit measures are relatively weak for the rating, and expected continued declines in operating trends will likely cause further deterioration in credit measures. At March 31, 2008, adjusted debt to EBITDA was 6.1x.

JUPITER HIGH-GRADE: Moody's Junks Rating on $1.29BB Senior Notes----------------------------------------------------------------Moody's Investors Service has downgraded the ratings of four classes of notes issued by Jupiter High-Grade CDO V, Ltd., and left on review for possible further downgrade the rating of one of these classes of notes as:

Jupiter High-Grade CDO V, Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. On Nov. 2, 2007 the transaction experienced an event of default caused by a failure of the Class A Overcollateralization Ratio to be greater than or equal to the required amount pursuant Section 5.01(i) of the Indenture dated March 28, 2007. That event of default is continuing.

The rating actions taken today reflect continuing deterioration in the credit quality of the underlying portfolio and the increased expected loss associated with the transaction. Losses are attributed to diminished credit quality on the underlying portfolio.

As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral and the Notes. The severity of losses may depend on the timing and choice of remedy to be pursued following the default event. Because of this uncertainty, the rating of the Class A-1 Notes issued by Jupiter High-Grade CDO V Ltd. is on review for possible further action.

The Hon. Russell Nelms of the United States Bankruptcy Court for the Northern District of Texas will convene a hearing on June 24, 2008, at 9:30 a.m., to consider confirmation of the Amended Joint Chapter 11 Plan of Liquidation dated May 14, 2008, of Kitty Hawk Inc. and its debtor-affiliates. Objections, if any, are due June 23, 2008.

A full-text copy of the Amended Joint Chapter 11 Plan of Liquidation is available for free at:

The Plan contemplates the liquidation of the Debtors' remainingassets and distribution of the proceeds to all valid claimholders, according to the Disclosure Statement. All distributionswill be made by the disbursing agent.

As of March 18, 2008, the Debtors recorded approximately $55,122,451 in claims, consisting of $1,674,692 in secured claims, $5,794,921 in priority claims and a $47,652,838 in general unsecured claims. At least 593 claims have been filed against the Debtors as of May 1, 2008.

On April 28, 2008, the Debtors reached an agreement with Air Line Pilots Association (ALPA) that provides, on a net basis, for the payment of $870,000 in the aggregate to ALPA, which represent a recovery of approximately 6.9% of all claims asserted by ALPA.

The Debtors have yielded at least $5.96 million for the sale of various equipment an property.

Kronos recorded a net loss for each of the nine months ended March 31, 2008 and March 31, 2007 of $2,339,000 and $2,501,000, respectively. The decrease in the net loss for the nine months ended March 31, 2008 compared with the comparable period of 2007 was principally the result of $3,134,000 increase in gross profit to $3,197,000, partially offset by a $1,696,000 in accretion of note discount, a $1,039,000 increase in operating costs to $3,341,000, and a $237,000 increase in interest expense to $499,000.

Revenues for the nine months ended March 31, 2008 were $3,598,000compared to $156,000 for the comparable period of 2007. Revenues for the quarter ended March 31, 2008 consisted of revenues from the company's agreements with Tessera, a national retailer, a global consumer products company and its Russian medical products partner. Selling, General and Administrative expenses for the quarter ended March 31, 2008 increased $1,039,000 from thecorresponding period of 2007 to $3,341,000.

The increase was principally the result of a $614,000 increase in compensation and benefits, primarily as a result of an increase in the expense of amortizing stock options that vested during the 2008 period, and a $288,000 increase in professional services as a result of a new consulting arrangement and legal expenses. Interest expense for the quarter ended March 31, 2008 was $499,000 compared with $262,000 for the corresponding period of the prior year. The increase in interest expense was principally the interest on promissory notes payable to AirWorks, Hilltop, Sands and Critical Capital.

Kronos' total assets at March 31, 2008 were $5,060,000 compared with $2,111,000 at June 30, 2007. Total assets at March 31, 2008 and June 30, 2007 were comprised primarily of $3,579,000 and $364,000, respectively, of cash and $1,450,000 and $1,723,000, respectively, of patents/intellectual property. The Company had a working capital surplus of $927,000 at March 31, 2008 and a working capital deficit of $1,208,000 at June 30, 2007.

Kronos historically has had working capital deficits. The Report of Independent Registered Public Accounting Firm for the year ended June 30, 2007, includes an explanatory paragraph to their audit opinion stating that our recurring losses from operations and working capital deficiency raise doubt about the company's ability to continue as a going concern. Management has taken these steps with respect to its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue in existence:

(1) Tessera

In March 2008, Kronos executed an Intellectual Property Transfer and License Agreement with Tessera Technologies, Inc. for the transfer and license of certain intellectual property rights related to Kronos proprietary technologies to Tessera. Kronos received $3.5 million from Tessera in exchange for the transfer of select Kronos patents covering micro-cooling applications and for an exclusive license to the Kronos technology for ionic micro-cooling of integrated circuit devices or discrete electrical components. Kronos retained the rights to use these patents for all applications outside of the field of micro-cooling. Tessera further has the right to acquire additional Kronos IP relating to micro-cooling applications for four quarterly payments of $0.5 million each beginning in July 1, 2008.

(2) Washington Technology Center

In June 2007, the Washington Technology Center awarded the Company, in conjunction with the University of Washington and Intel Corporation, continued funding for a research and development project based on a novel cooling system for microelectronics and computer chips. This Phase III award follows the Company's Phase 1 and Phase II awards in December 2005 and June 2006, respectively.

Funding may be available but Kronos has not determined if this funding will be sufficient because the lenders, at their sole discretion, control the timing of and whether the funding will occur and Tessera has, at their sole discretion, the option to acquire additional Kronos IP.

Subsequent to the end of the quarter, the Company repaid $859,000 plus all of the interest and fees ($59,487) owed on the Critical Capital and Sands Brothers Note and made a partial principal payment of $628,000 on the AirWorks and Hilltop Notes.

Net cash provided in operating activities for the period ending March 31, 2008 was $1,011,000 compared with $1,560,000 net cash used in operating activities in the comparable period in 2007.

Business Update

Micro-Cooling License: During the quarter ended March 31, 2008, Kronos executed the sale and licensing of certain intellectual property (IP) rights related to Kronos proprietary technologies to Tessera Technologies, Inc., a leading provider of miniaturization technologies for the electronics industry. Kronos received a one-time $3.5 million payment from Tessera in exchange for the transfer of select Kronos patents covering micro-cooling applications and an exclusive license to the Kronos technology for ionic micro-cooling of integrated circuit devices or discrete electrical components. Kronos retains the rights to use thesepatents for applications outside of the field of micro-cooling. Tessera has the further right to acquire additional Kronos IP relating to micro-cooling applications, and the two companies have the option to continue to jointly develop new technologies in this field.

Consumer Standalone Air Purification Products: During the nine months of fiscal 2008, Kronos executed a Letter of Intent for the development, manufacture and sale of air purification devices, based upon Kronos' proprietary air movement and purification technology, with a leading national retailer. Under the terms of the Letter of Intent, the retailer has paid Kronos a portion of the development cost toward the new products and will contribute resources to assist in the product development process.

The intent of the parties is for Kronos to lead and manage all development, production and manufacturing activities for the Kronos air purifier and for the retailer to actively market the Kronos air purifier through their distribution channels. In December 2007, Kronos completed the design and developed an Alpha Prototype for the customer. In January 2008, the parties initiated negotiations of a definitive Product Development and Purchase Agreement. In February 2008, the retailer filed for bankruptcy, which could negatively impact the Company's ability to finalize a definitive agreement and receive additional funds from the retailer. During the nine months ended March 31, 2008, Kronos received $250,000 in product development fees.

Consumer Kitchen Range Hood Products: In addition, during the ninemonths of 2008, Kronos continued its development of a silent kitchen range hood application based on its proprietary technology. In October 2007, under the terms of a development agreement, Kronos shipped additional range hood prototypes to a global consumer products customer for testing and evaluation. During the nine months ended March 31, 2008, Kronos earned$34,000 in product development fees.

Medical Air Purification Products: During the first nine months of2008, Kronos earned $45,000 in revenue from licensing fees from its license agreement with EOL, Kronos' medical partner for manufacturing and distributing Kronos air purifiers in Russia and other Commonwealth of Independent States.

Details of the Company's results can be found in its quarterly report on Form 10-QSB filed with the SEC on May 15, 2008, at

Located in Belmont, Mass. Kronos Advanced Technologies Inc. (OTC Bulletin Board: KNOS -- http://www.kronosati.com/-- through its wholly owned subsidiary, Kronos Air Technologies Inc., has developed a new, proprietary air movement and purification system that utilizes high voltage electronics and electrodes to silently move and clean air without any moving parts. Kronos is commercializing its technology for standalone and embedded products across multiple residential, commercial, industrial and military markets. The company's business strategy includes a combination of building internal capabilities, establishing strategic alliances and structuring licensing arrangements.

LA PALOMA: S&P Puts Ratings Under Neg. Watch After Merger Notice----------------------------------------------------------------Standard & Poor's Ratings Services placed its ratings on La Paloma Generating Co. LLC, including the 'B+' on the senior secured first lien, and 'CCC+' on the senior secured second lien, on CreditWatch with negative implications.

"The CreditWatch listing follows the merger announcement by La Paloma's majority owner, Complete Energy Holdings, LLC, with GSC Acquisition Company," said Standard & Poor's credit analyst Terrence Marshall. "The proposed deal is expected to close late in the third quarter of 2008, and is subject to GSC acquisition Company's shareholder and regulatory approval."

Following the transaction, there is the possibility that the third-party investors will exercise tag-along rights and that Acquisition Co will be rolled into CEH/La Paloma Holding Company, LLC. In such a scenario, Complete Energy would become the sole parent company of La Paloma, and the independent director at Acquisition Co could be removed. This situation could potentially weaken the structure and would constrain the rating at La Paloma to that of Complete Energy.

Standard & Poor's will consider the CreditWatch resolved following the successful close of the transaction and will determine whether the structure has remained intact or if Complete Energy's implied rating is not a constraint to that of La Paloma. Alternatively, the CreditWatch could be resolved if the transaction does not move forward.

LAM RESEARCH: S&P Lifts Corporate Credit Rating to BB from BB---------------------------------------------------------------Standard & Poor's Ratings Services raised its corporate credit rating on Fremont, California-based Lam Research Corp. to 'BB' from 'BB-'. At the same time, S&P removed the rating from CreditWatch, where it had been placed with positive implications on April 11, 2008. The outlook is stable.

The rating action follows Lam's strong performance during the upside of the most recent semiconductor cycle; its more variable cost structure, which should enable it to perform better in the current downturn than it has in prior cycles; and its moderate leverage.

"The rating on Lam reflects the company's narrow business focus and high customer and product concentration in the volatile semiconductor capital equipment industry," said Standard & Poor's credit analyst Joseph Spence. "This is offset partially by the company's leadership position in its main niche, good liquidity, and low debt leverage."

Lam is a global developer, manufacturer, and marketer of wafer etch, patterning, and cleaning tools used to manufacture memory, logic, and microelectromechanical systems.

"The downgrade reflects Lennar's very weak profitability so far in this housing downturn, along with our expectation that the company will face ongoing earnings pressure due to worsening operating conditions, particularly in its important California and Florida markets," said Standard & Poor's credit analyst James Fielding. "Lower home prices and a slower sales pace in many communities have contributed to very high impairments and other noncash charges, which have materially reduced shareholders' equity."

While Lennar's debt-to-capital ratios have risen, they remain in line with those of its peers when adjusted to reflect the company's considerable exposure to off-balance-sheet joint ventures. Additionally, the company has successfully converted inventory to cash, and its currently very solid liquidity position remains a primary support to the current ratings.

The negative outlook assumes that operating conditions in many of Lennar's key housing markets will continue to deteriorate and acknowledges limited clarity with regard to the timing of a cyclical trough. Lennar has maintained financial flexibility through the downturn, and we would revise the outlook to stable if the company can preserve solid cash balances and demonstrate the ability to operate profitably at sharply lower production levels. Conversely, S&P would lower the rating if the company's current liquidity position were to erode as a consequence of deteriorating market conditions or substantial off-balance-sheet capital calls.

LEXINGTON CAPITAL: Moody's Chips Ba2 Ratings on Two Classes to Ca -----------------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Lexington Capital Funding III Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

LIBERTAS PREFERRED: Moody's Trims Ratings on Seven Classes to Ca ----------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Libertas Preferred Funding IV, Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

LIBERTAS PREFERRED: Moody's Pares Ratings on Two Classes to Caa2 ----------------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Libertas Preferred Funding II, Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

LONGPORT FUNDING: Moody's Cuts $13MM Notes Rating to B2 from Baa2-----------------------------------------------------------------Moody's Investors Service downgraded and left on review for possible downgrade the ratings on these notes issued by Longport Funding II, Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

LOUISIANA RIVERBOAT: Files Schedules of Assets and Liabilities--------------------------------------------------------------Louisiana Riverboat Gaming Partnership and its affiliates delivered to the United States Bankruptcy Court for the Western District of Louisiana their schedules of assets and liabilities disclosing:

Headquartered in Bossier City, Louisiana, Louisiana Riverboat Gaming Partnership, which does business as Diamond Jacks Casino & Resort, and its debtor-affiliates -- http://www.islecorp.com/-- operate casinos and hotels. The company and five of its affiliates filed for Chapter 11 protection on March 11, 2008 (Bankr. W.D. La. Lead Case No.08-10824). Tristan E. Manthey, Esq. and William H. Patrick, III, Esq., at Heller Draper Hayden Patrick and Horn, represent the Debtors.

MONTROSE HARBOR: Moody's Chips Ratings on Five Note Classes to 'C' ------------------------------------------------------------------Moody's Investors Service downgraded the ratings of six classes of notes issued by Montrose Harbor CDO I, Ltd., and left on review for possible further downgrade rating of one of these classes of notes as:

Montrose Harbor CDO I, Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. On Nov. 29, 2007 the transaction experienced an event of default caused by a failure of the Net Outstanding Portfolio Collateral Balance to be greater than or equal to the required amount set forth in Section 5.1(i) of the Indenture dated July 31, 2006. That event of default is continuing. Also, Moody's has received notice from the Trustee that it has been directed by a majority of the controlling class to declare the principal of and accrued and unpaid interest on the Notes to be immediately due and payable.

The rating actions taken today reflect continuing deterioration in the credit quality of the underlying portfolio and the increased expected loss associated with the transaction. Losses are attributed to diminished credit quality on the underlying portfolio.

As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, the Controlling Class may be entitled to direct the Trustee to take particular actions with respect to the Collateral. The severity of losses may depend on the timing and choice of remedy to be pursued by the Controlling Class. Because of this uncertainty, the rating of Class A-1 Notes issued by Montrose Harbor CDO I, Ltd. is on review for possible further action.

MRS. FIELDS: March 29 Balance Sheet Upside-Down by $100 Million---------------------------------------------------------------Mrs. Fields Famous Brands LLC's consolidated balance sheet at March 29, 2008, showed $147.2 million in total assets and $247.2 million in total liabilities, resulting in a $100.0 million total member's deficit.

The company reported net income of $6.1 million on total revenues of $15.1 million for the first quarter ended March 29, 2008, compared with a net loss of $2.7 million on total revenues of $13.8 million in the same period ended March 31, 2007.

Results for the first quarter of 2008 includes income from discontinued operations of $10.5 million, an increase of $8.0 million from $2.5 million for the 13 weeks ended March 31, 2007. This increase was primarily due to the gain related to the sale of GAC of $10.4 million partially offset by a reduction in contribution of the GAC/Pretzel reportable operating segment.

Loss from continuing operations was $2.4 million for the 13 weeks ended March 29, 2008, an increase of $1.0 million or 74.0% from $1.4 million for the 13 weeks ended March 31, 2007. The increase in loss from continuing operations was primarily due to:

-- decreased contribution from the company's business units of $600,000;

-- increased general and administrative expenses of $400,000; and

-- gain on sale of land held for sale of $100,000 that occurred in 2007.

The foregoing increases in loss from continuing operations were partially offset by increased amortization and other operating expenses of $100,000.

Recent Developments

On Jan. 29, 2008, the company and its wholly-owned subsidiaries, GACCF LLC and GAMAN LLC, formerly Great American Cookie Company Franchising LLC and Great American Manufacturing LLC, completed the sale of substantially all of the assets of GAC to a wholly-owned subsidiary of NexCen Brands Inc. pursuant to an asset purchase agreement for $93.6 million.

The purchase price consisted of $89.0 million in cash and 1,099,290 shares of NexCen Brands common stock valued at $4.23 per share. The net cash proceeds from the sale of GAC is considered restricted cash and is reflected as restricted cash in the company's consolidated financial statements.

Liquidity and Capital Resources

At March 29, 2008, the company had $3.2 million of cash on hand, excluding $96.7 million of restricted cash.

The company is highly leveraged. At March 29, 2008, and Dec. 29, 2007, the company had $195.7 million of long-term debt.

The company disclosed in its Form 10-Q for the three months ended March 29, 2008, that it may be unable to make its scheduled semi-annual interest payments on its 9 percent Senior Secured Notes and 11 1/2 percent Senior Secured Notes. The aggregate amount of each semi-annual payment is $10.25 million and the next payment is due in September 2008.

Management and its major shareholder have engaged Blackstone Advisory Services to assist in reviewing the company's strategic alternatives for raising additional equity capital and restructuring its Senior Secured Notes.

As reported in the Troubled Company Reporter on April 18, 2008,KPMG LLP, in Salt Lake City, expressed substantial doubt about Mrs. Fields Famous Brands LLC's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 29, 2007. The auditing firm pointed to the company's recurring net losses, negative cash flows from, and net member's deficit at Dec. 29, 2007.

About Mrs. Fields

Mrs. Fields Famous Brands LLC -- http://www.mrsfields.com/-- is a well established franchisor in the premium snack food industry, featuring Mrs. Fields(R) and TCBY(R) as the company's core brands. As of March 29, 2008, the company's franchise systems operated through a network of 1,278 retail concept locations throughout the United States and in 21 foreign countries.

Revenue for the three months ended March 31, 2008 was $4,025,600. Revenue for the previous fiscal year quarter was inconsequential at $100,000.

For the three months ended March 31, 2008, loss from operations was $1,191,205 as compared to loss from operations of $1,079,589 for the same quarter in 2007. The $111,616 increase in loss of operations was primarily related to increases in certain infrastructure costs and equity based compensation charges, offset in part by the gross profit earned on the sales in the current quarter.

During the three month period ended March 31, 2008, the Company recognized approximately $2.1 million in non-cash expenses resulting from the accretion of certain debt discounts, the amortization of deferred expenses related to the debt, SFAS 123(R) expenses for stock options and stock compensation accruals and the fair value of certain put options issued in the Series H Convertible Preferred Stock issuance transaction.

The Company reported a net loss applicable to common stockholders of $2,797,272 million for the third fiscal quarter. The current quarter net loss compares to a net loss of $1,955,911 for the third fiscal quarter 2007.

Cash and equivalents as of March 31, 2008 were $2.3 million including $1.5 million in restricted cash. Accounts receivable totaled $4.1 million at March 31, 2008.

As of March 31, 2008, the company had $10.1 million total assets and $12.1 million total liabilities, resulting in a stockholders' deficit of $2 million.

The Company's commitment to invest $2.5 million in Current Technology Corporation (CRTCF:OB) appears on its balance sheet as $1.5 million representing the amount paid as of March 31, 2008. As of the date of May 15, 2008, the company's significant minority interest in Current Technology is now worth $15 million based upon its quoted market price.

To supplement MSGI's consolidated financial statements presented in accordance with GAAP, MSGI is providing certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP net loss and non-GAAP loss per share. MSGI's reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are included to enhance investors' overall understanding of MSGI's current financial performance. Specifically, the Company believes the non-GAAP measures provide useful information to management and to investors by isolating certain expenses, gains and losses that may not be indicative of its core operating results and business outlook.

Jeremy Barbera, Chairman and CEO commented, "Last month, MSGI announced that it had executed a $40 million contract with a Korea based technology partner to manufacture and supply the military with proprietary touch screen systems. The initial $40 million order is expected to be completed this year and is part of a five-year contract. We are hopeful that the new line of military products and services will increase in volume and scope with successful reports of live use in the battlefield. This is our second material multi-year contract, as we are currently executing and making deliveries upon the requirements of last year's $15 million sub-contracting agreement with Apro Media Corp.

"Earlier this year MSGI announced an expansion of our mission critical wireless product offerings by taking a significant $2.5 million minority investment in Current Technology Corporation (OTCBB: CRTCF). Current Technology subsequently acquired a 51% stake in Celevoke, Inc., developers of a proprietary GPS asset-tracking platform hosting a variety of marquee clients including General Electric, Travelers Group, CrimeStopper, News Corp., Tracell and many others. In recent weeks Current Technology has themselves announced initiatives in Latin-American markets where the use of GPS technology has become mandated by law, as well as significant domestic client victories with the risk control unit of Travelers Group, and the Federal Credit Union of 20th Century Fox.

"As part of our strategic investment, Current Technology has agreed to outsource 25% of its GPS asset-tracking business to MSGI for a period of three years. Our investment of $2.5 million in Current Technology is now worth $15 million as of [May 15, 2008].

"Our strategic objective is to utilize innovative, patented mobile technology to provide protection and risk mitigation for valuable assets, critical infrastructure and high-ranking government executives. This network of wireless applications will eventually expand to form an unprecedented global security platform, which we call LSAD: Land-Sea-Air-Defense."

About MSGI Security

MSGI Security Solutions Inc. (Other OTC: MSGI) --http://www.msgisecurity.com/-- provides of proprietary security products and services to commercial and governmental organizationsworldwide. MSGI is developing a combination of innovative emerging businesses that leverage information and technology with a focus on encryption technologies for actionable surveillance and intelligence monitoring. The company is headquartered in New York City where it serves the needs of counter-terrorism, public safety, and law enforcement in the United States, Europe, the Middle East and Asia.

As reported in the Troubled Company Reporter on Oct. 18, 2007,Amper, Politziner & Mattia, P.C., in Edison, N.J., expressed substantial doubt about MSGI Security Solutions Inc.'s ability tocontinue as a going concern after auditing the company'sconsolidated financial statements for the year ended June 30,2007. The auditing firm stated that the company has suffered recurring losses and negative cash flows from operations.

NEPTUNE CDO: Moody's Lowers Ratings, to Undertake Review--------------------------------------------------------Moody's Investors Service has placed on review for possible downgrade the ratings on these notes issued by Neptune CDO II, Ltd.

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

NEPTUNE CDO: Moody's Cuts Rating on $7.5MM Class A-2L Notes to Ba2------------------------------------------------------------------Moody's Investors Service downgraded and placed on review for possible further downgrade the ratings on these notes issued by Neptune CDO 2004-1 Ltd.:

Neptune CDO V, Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. On Nov. 2, 2007, the transaction experienced an event of default caused by a failure of the Senior Class A Overcollateralization Ratio to exceed the required level set forth in Section 5.1(f) of the Indenture dated June 7, 2007. That event of default is continuing.

The rating actions taken today reflect continuing deterioration in the credit quality of the underlying portfolio and the increased expected loss associated with the transaction. Losses are attributed to diminished credit quality on the underlying portfolio.

NEPTUNE CDO: Moody's Lowers Rating on $270MM Notes to Ba3 from Aa1 ------------------------------------------------------------------Moody's Investors Service downgraded and placed on review for possible further downgrade the ratings on these notes issued by Neptune CDO III, Ltd.:

"Achieving net income from operations for our fiscal third quarter reflects our commitment to turn the company around and gives us momentum going into our confirmation hearing, which is scheduled for June, 2008," said Scott Foote, Chief Executive Officer and President.

The Company reported third quarter revenue of approximately $4.0 million, which represents a decrease of $0.2 million or 6% percent from the comparable quarter ended March 31st, 2007. The Company reported a net loss of approximately $0.06 million compared to a net loss of approximately $0.6 million during the same period in the prior year. Net losses attributable to common shareholders were approximately $0.3 million, or a net loss of $0.01 per share, as compared to net losses attributable to common shareholders of approximately $0.8 million or a net loss of $0.02 per share during the same period in the prior year.

Based in Tampa, Florida, NetWolves Corporation (Pink Sheets: WOLV)-- http://www.netwolves.com/-- provides telecommunications and Internet-managed services to more than 1,000 customers through itsneutral FCC-licensed carrier. Some of NetWolves' customersinclude General Electric, University of Florida, McLaneCompany, JoAnn Stores and Marchon Eyewear.

The company and three of its affiliates filed for Chapter 11protection on May 21, 2007 (Bankr. M.D. Fla. Case Nos. 07-04186through 07-04196). David S. Jennis, Esq., at Jennis Bowen &Brundage, P.L., represent the Debtors in their restructuringefforts. When the Debtors filed for protection from theircreditors, it listed total assets of $8,847,572 and totalliabilities of $7,637,029.

The Troubled Company Reporter reported on May 9, 2008, that the Hon. Paul M. Glenn of the U.S. Bankruptcy Court for the Middle District of Florida approved the Disclosure Statement for a Second Amended Joint Plan of Reorganization of NetWolves Corp. and its debtor-affiliates, based on a finding that it contained adequate information for the purpose of soliciting votes on its Chapter 11 plan of reorganization. A full-text copy of the Second Amended Joint Disclosure Statement is available for free at http://bankrupt.com/misc/Netwolves

NORANDA ALUMINUM: March 31 Balance Sheet Upside Down by $133.1MM----------------------------------------------------------------Noranda Aluminum Holding Corporation released its financial results for the first quarter of 2008.

Highlights for the first quarter ended March 31, 2008, include:

* Revenues of $300.3 million, operating income of $41.4 million, net income of $17.2 million

* Adjusted EBITDA of $84.7 million

* Generated $78.6 million in Cash from Operating Activities for the quarter

* Achieved the fourth consecutive quarter of record production at New Madrid smelter

* Filed an SEC Registration Statement on Form S-4 on January 31, 2008, as amended on May 9, 2008, related to an exchange offer (the "Exchange Offer") for up to $510,000 aggregate principal amount of Senior Floating Rate Notes due 2015 and up to $220,000 aggregate principal amount of Senior Floating Rate Notes due 2014 that are registered under the Securities Act of 1933, as amended, for an equal principal amount of its outstanding Senior Floating Rate Notes due 2015 and Senior Floating Rate Notes due 2014

Highlights subsequent to the first quarter ended March 31, 2008, include:

* Appointed Kyle Lorentzen as Chief Operating Officer of the Company effective May 5, 2008

* Filed a Registration Statement on Form S-1 relating to the initial public offering of shares of common stock by Noranda Aluminum Holding Corporation with the Securities and Exchange Commission on May 8, 2008

* Launched the Exchange Offer on May 13, 2008

First Quarter Results

First quarter 2008 sales were $300.3 million compared to $344.6 million reported for the first quarter of 2007. Sales in the company's upstream business were approximately 15% lower, at $159.3 million, from the $186.4 million reported last year. This decrease primarily was due to a 6.9% decrease in the average Midwest Transaction aluminum price from $1.31 per pound to $1.22 per pound, as well as an 8.2% decrease in third party shipments.

The lower third party shipments in the upstream business resulted from the decision to ship higher volumes of the company's sow product to its downstream business during the quarter, reducing the cost of purchases of aluminum from external suppliers. Sales in the company's downstream business decreased from $158.2 million for the three months ended March 31, 2007, to $141.0 million for the same period in 2008, primarily as a result of a decrease in the underlying Midwest Transaction price for aluminum and lower shipments.

Operating income for the first quarter of 2008 was $41.4 million compared to $60.7 million reported for the first quarter of 2007, a decrease of $19.3 million. This decrease mainly was the result of lower aluminum prices, higher natural gas costs, and lower downstream shipments compared with the first quarter of 2007. Cost of sales for the three months ended March 31, 2008, decreased 12.0% to $242.6 million from the $275.6 million reported for the same period last year. This reduction was impacted primarily by the lower cost of third party aluminum purchases for the downstream business.

Increased depreciation, related to purchase accounting adjustments resulting from the acquisition of the Company by affiliates of Apollo Management, L.P. in May 2007, reduced operating income by $5.0 million compared with the first quarter of 2007. Selling, general and administrative expenses for the first quarter of 2008 were $16.3 million compared to $8.3 million reported for the same period in 2007. The increase was a result of increased Sarbanes-Oxley implementation activities, consulting, audit and other administrative costs, including activities related to the filings of the Registration Statements on Form S-4 and S-1.

Net income reported for the first quarter of 2008 was $17.2 million compared to the $29.8 million reported for the first quarter in 2007. This decrease is the result of the net effect of the items described above and increased interest expense, partially offset by lower income taxes, and a gain on derivative instruments and hedging activities. Interest expense increased $21.1 million to $24.2 million for the three months ended March 31, 2008, compared to $3.1 million for the same three months in 2007.

The increase primarily was the result of the indebtedness incurred as a result of the acquisition by affiliates of Apollo Management, L.P. in May 2007. Income taxes decreased from $28.5 million for the first quarter of 2007 to $8.7 million for the first quarter of 2008. The decrease in the provision for income taxes resulted in an effective tax rate for continuing operations decreasing to 33.5% in the first quarter of 2008 from 48.9% in the first quarter of 2007.

The previous year's higher first quarter effective tax rate primarily was related to a permanent difference in income from the cancellation of debt related to the divestiture of a subsidiary. The Company reported a gain of $5.6 million in the three months ended March 31, 2008, compared to a loss of $1.4 million in the three months ended March 31, 2007, on derivative instruments and hedging activities. This gain primarily was related to changes in the fair value of a portion of the company's fixed-price aluminum swaps, and its interest rate swaps.

Adjusted EBITDA totaled $84.7 million for the first quarter of 2008 compared to $92.5 million reported for the same period last year. The reduction mainly was due to lower aluminum prices and higher natural gas costs, partially offset by record smelter production and lower power costs. Compared with the fourth quarter of 2007, Adjusted EBITDA increased by approximately $22 million mainly due to improved aluminum prices and higher smelter production.

Net cash provided by operating activities totaled $78.6 million in the three months ended March 31, 2008, compared to $43.3 million in the three months ended March 31, 2007. Working capital decreased by $20.3 million in the first quarter of 2008 versus a $7.2 million decrease in the first quarter of 2007.

During the quarter, the Company entered into additional forward aluminum swaps. Including the most recent hedges, the Company has hedged approximately 50% of forecasted production through 2012 at prices which are attractive compared with the Company's expected cost of producing primary aluminum.

The Company's $250.0 million revolving credit facility remained undrawn at March 31, 2008, with cash-on-hand of $148.2 million, compared with $75.6 million at December 31, 2007. Total debt at the end of the first quarter of 2008 was $1,151.7 million. The Company's net debt to Adjusted EBITDA ratio at March 31, 2008, was 0.91x, 2.61x, and 3.33x at the Senior Secured Level, Senior Debt, and the Holdco level (as defined in the credit documents and indentures covering the note), respectively.

Kip Smith, the Company's President and CEO, stated, "I am pleased to report that we continue to make significant progress related to productivity and safety performance. Of specific note is the first quarter production record at New Madrid, which represents the fourth consecutive quarterly record for this smelter."

Effective May 5, 2008, Mr. Kyle Lorentzen, was named Chief Operating Officer of the Company. Mr. Lorentzen most recently served as Vice President of Corporate Development with Berry Plastics Corporation (BPC). Prior to his tenure in that role, Kyle served as Vice President of Strategic Development for Covalence Specialty Materials, which merged with BPC under the common control of Apollo Management, L.P.

Before working for Covalence, Mr. Lorentzen served as Vice President of Finance for Hexion's Epoxy and Phenolics Division. He came to Hexion from Borden Chemical, where he was Director of Finance, when the two companies merged under the common control of Apollo Management, L.P. to form Hexion. Other assignments include various financial, strategic and business roles for Hampshire Chemical and W.R. Grace. Mr. Lorentzen holds a BA in Economics from Wake Forest University and an MBA from the University of Massachusetts.

"I am delighted that Kyle has joined our Company. Kyle is an experienced professional with a diverse background and he is a significant addition to our management team," said Kip Smith, President and CEO of Noranda.

Balance Sheet

As of March 31, 2008, the company had total assets of $1.7 billion and total liabilities of $1.8 billion, resulting in total shareholders' deficiency of $133.1 million.

About Noranda Aluminum

Noranda Aluminum Holding Corp. -- http://www.norandaaluminum.com/-- is a North American integrated producer of value-added primaryaluminum products as well as high quality rolled aluminum coils. The company has two businesses, the primary metals business, orupstream business, which produces approximately 250,000 metrictons of primary aluminum annually, and the rolling mills, ordownstream business, which is one of the largest foil producers inNorth America and a major producer of light gauge sheet products. Noranda is a private company owned by affiliates of ApolloManagement LP.

ORAGENICS INC: Has Until October 27 to Comply with AMEX Criteria----------------------------------------------------------------Oragenics Inc. received notice from the American Stock Exchange advising the company that it does not meet certain of the listing standards as set forth in part 10 of the AMEX Company Guide. AMEX granted an extension to the company until Oct. 27, 2008, to regain compliance with Section 1003(a)(i).

The biopharmaceutical development company disclosed in its Securities and Exchange Commission filings that it has been out of compliance with certain AMEX listing requirements.

In a letter to the company, AMEX stated that the company was not in compliance with Section 1003(a)(ii) of the AMEX Company Guide because the company had stockholders' equity of less than $4 million, losses from continuing operations and net losses in three of its four most recent fiscal years.

AMEX also noted that the company had received an unqualified audit report for the year ended Dec. 31, 2007, that contained an explanatory paragraph as to the company's ability to continue as a going concern.

As a listed biopharmaceutical development company, its revenues are limited until its products are commercialized, a time-consuming process that requires extensive research and development expenditures as well as selected clinical trials that are mandated by various regulatory requirements both in the U.S. and around tha world.

In various SEC filings, the company disclosed and continues to make disclosures that it has submitted a plan of compliance, dated May 24, 2007, to AMEX with respect to its noncompliance with Section 1003(a)(i) of the AMEX Company Guide and such Plan was subsequently approved by AMEX.

The company intends to submit a supplement to this plan to AMEX within the 30 days permitted by AMEX that will outline Oragenics' strategy to bring itself into compliance with Sections 1003(a)(i) and (ii) by the October 27, 2008 deadline.

If the company's plan to regain compliance is accepted by the AMEX, it is anticipated that the company will be able to continue its listing for the remainder of the extension period, during which time it will be subject to periodic review to determine progress consistent with the plan.

"Management is taking all reasonable steps as expeditiously as possible to commercialize our products," Rick Welch, chairman of Oragenics, said. "Furthermore, we are vigorously pursuing financing arrangements to bolster the financial strength of our company, so that can gain full compliance with AMEX regulations."

"With the recent appointment of our four new directors who bring a very significant depth of biotechnology, pharmaceutical and clinical experience to our company, we are confident that we will be able to increase the visibility of our deep pipeline of potential products, in order to accelerate the commercialization of our products, each of which is targeted to very large market opportunities," Mr. Welch continued. "We believe that all of our potential products are based on remarkable and extraordinary science."

With the company's appointment of Stanley B. Stein as president and CEO, Oragenics intends to leverage his extensive healthcare background, which includes work in biotechnology, pharmaceuticals and healthcare services.

Mr. Stein's investment banking experience spans over 25 years. He is guiding the company to take advantage of various strategic, financial and business opportunities now available to it with the goals of sustaining anticipated operations and maximizing shareholder value.

About Oragenics Inc.

Headquartered in Alachua, Florida, Oragenics Inc. (AMEX: ONI) -- http://www.oragenics.com/-- dba ONI BioPharma Inc., operates as an early-stage biotechnology company in the United States. It focuses on developing technologies associated with oral health, broad spectrum antibiotics, and other general health benefits. The company was founded in 1996.

The company's operating activities used cash of $531,881 for thethree months ended March 31, 2008.

ORCHID STRUCTURED: Moody's Chips A3 Rating on $15MM Notes to Ca ---------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible further downgrade the ratings on these notes issued by Orchid Structured Finance CDO II, LTD:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

ORIGEN FINANCIAL: Posts $25 Million Net Loss in 2008 First Quarter------------------------------------------------------------------Origen Financial Inc. posted a net loss of $25.0 million for the first quarter ended March 31, 2008, compared with net income of $1.7 million for the quarter ended March 31, 2007. No dividend was declared by Origen's Board of Directors for the first quarter.

Highlights for Quarter

Loan origination volume decreased 47.0% to $41.4 million versus a year ago.

Loans processed for third parties totaled $29.8 million for the quarter as compared to $22.8 million for the year ago quarter, an increase of 31.0%.

Total revenue increased 16.0% to $29.9 million versus $25.7 million for the prior year quarter.

Non-performing loans as a percent of average outstanding loan principal balances increased to 0.6% at March 31, 2008, from 0.5% a year ago.

Origen's loan warehouse facility with Citigroup Global Markets Realty Corporation was paid off with proceeds from the sale of un-securitized loans.

Financial Summary

Interest income was $24.0 million for the first quarter 2008, an increase of 15.0%, primarily due to an 18.0% increase over the same period a year ago in average interest earning assets.

Non-interest income, excluding a loss on the sale of loans, associated hedge costs and a lower of cost or market adjustment on loans held for sale, increased 20.0% over the prior year's first quarter to $5.9 million.

Interest expense for the first quarter 2008 increased by 28.0% to $16.5 million from $12.9 million from last year's first quarter as a result of increased borrowings relating to the funding of securitized loans and borrowings to meet liquidity needs.

The provision for credit losses was $3.0 million for the first quarter 2008 compared with $1.8 million for the same quarter 2007. The increase was primarily the result of a 20.0% growth in the loan portfolio. Loan charge-offs for the 2008 quarter, at $2.4 million, were $300,000 less than charge-offs for the year ago quarter.

First quarter 2008 non-interest expenses of $9.3 million were virtually unchanged from the year ago quarter, but included approximately $700,000 of extraordinary legal and professional fees.

A loss on the sale of un-securitized loans and the costs to terminate related hedge positions reduced non-interest income by $25.5 million, as un-securitized loans funded on our loan warehouse facility were liquidated to pay off that facility.

Portfolio Performance

At March 31, 2008, loans more than 60 days delinquent were 1.0% of the owned loan portfolio compared to 0.9% at Dec. 31, 2007. The increase was due solely to the sale of approximately $176.0 million of performing loans during the first quarter 2008.Ronald A. Klein, Origen's chief executive officer, stated, "As previously disclosed, due to worsening conditions in the credit markets and the lack of a profitable securitization exit we were forced to sell our un-securitized loan portfolio at a substantial loss and cease originating loans for our owned portfolio.

"This sale does not reflect on the credit performance or long term realizable value of Origen's loan portfolio as our credit performance continues to be outstanding. Our delinquent loan dollars declined from year end 2007 to first quarter end 2008. We saw a further reduction in delinquency during April. Absent the loan sale we would have been profitable for the first quarter 2008."

Mr. Klein further stated, "Subsequent to quarter end we obtained a new credit facility to pay off our supplemental advance facility and announced an agreement to sell our loan servicing rights to Green Tree Servicing LLC. We will continue to manage our $1.0 billion securitized loan portfolio and other assets to preserve shareholder value, as part of a plan to be presented to our shareholders at the 2008 annual meeting."

Sale of Servicing Platform Assets

On April 30, 2008, the company entered into an agreement for the sale of its servicing platform assets to Green Tree Servicing LLC, a privately held financial services organization headquartered in St. Paul, Minnesota, which services the nation's largest portfolio of manufactured housing secured consumer loans and installment contracts, and is a leading servicer of residential mortgage loans and other consumer loan products.

The agreement provides for a purchase price for the acquired assets primarily based on 2.04% of the unpaid principal balance of the company's servicing portfolio that is transferred to Green Tree, calculated as of the closing date. As of March 31, 2008, the unpaid principal balance of the company's entire servicing portfolio was approximately $1.6 billion. In addition, at the closing Green Tree will pay the company 84.2% of the amount of certain servicing advances the company has made but for which it has not been reimbursed as of the closing.

Proceeds from the planned sale will be used to fully pay off the $15.0 million loan obtained on Sept. 11, 2007, and partially pay off the $46.0 million secured financing. As part of the sale transaction, Green Tree will assume the lease of the company's Fort Worth, Texas, servicing facility.

Completion of the sale is conditioned on approval by the company's stockholders, consents by third parties, including trustees of securitization trusts and rating agencies, and customary closing conditions for transactions of this type.

Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed$1.1 billion in total assets, $976.0 million in total liabilities, and $109.4 million in total stockholders' equity.

On April 8, 2008, the company completed a $46.0 million secured financing transaction. The proceeds from this transaction were used to pay off the company's supplemental advance facility and the facility was terminated on April 8, 2008.

About Origen Financial

Based in Southfield, Mich., Origen Financial Inc. (Nasdaq: ORGN)-- http://www.origenfinancial.com/-- is an internally managed and internally advised company that has elected to be taxed as a realestate investment trust. Origen has significant operations inFt. Worth, Texas.

According to Moody's, the rating actions are the result of the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

PHOENIX FOOTWEAR: Posts $280,000 Net Loss in 2008 First Quarter---------------------------------------------------------------Phoenix Footwear Group Inc. reported a net loss of $280,000 on net sales of $22.0 million for the first quarter ended March 29, 2008, compared with net income of $414,000 on net sales of $21.3 million in the same period last year. Results for the first quarter of fiscal 2007 included net income from discontinued operations of $1.4 million, absent in 2008.

Consolidated gross profit for the first quarter of fiscal 2008 decreased to $7.9 million compared to $8.3 million for the comparable prior year period. Gross margin decreased to 36.0% compared to 39.0% in the prior year period. The decrease in gross margin was primarily due to an increase in sales incentives and allowances. Additionally, royalty fees increased as a percent of sales due to minimum royalties associated with the Tommy Bahama Footwear brand and due to an increase in sales mix of licensed products in the accessories segment.

Going Concern Disclaimer

As reported in Troubled Company Reporter on April 29, 2008,Grant Thornton LLP, in Irvine, Calif., expressed substantial doubt about Phoenix Footwear Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 29, 2007.

The auditing firm reported that the company incurred a net lossfrom continuing operations of $16,593,000 for the year endedDec. 29, 2007, and the company is not in compliance with financialcovenants under its current credit agreement as of Dec. 29, 2007.

The company has not requested a waiver for the respective defaults and is in the process of replacing the existing facility with a new lender. If the company is not successful in refinancing the existing facility through a new bank it will seek to refinance its debt on new terms with its existing bank. The company disclosed that presently it has insufficient cash to pay its bank debt in full.

Balance Sheet

At March 29, 2008, the company's consolidated balance sheet showed$56.6 million in total assets, $25.6 million in total liabilities, and $31.0 million in total stockholders' equity.

PINE MOUNTAIN: Moody's to Review Ratings for Possible Downgrade ---------------------------------------------------------------Moody's Investors Service downgraded and placed on review for possible further downgrade the ratings on these notes issued by Pine Mountain CDO Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

PINE MOUNTAIN: Moody's Downgrades Ratings on Three Notes to C -------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Pine Mountain CDO II Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

PLASTECH ENGINEERED: Will Close Elwood Plant on July 13-------------------------------------------------------Plastech Engineered Products Inc. and its debtor-affiliates decided to shut down its plant located at Elwood, Illinois, the Chicabo Tribune reports.

The Debtors, in a letter released last week, disclosed that they will close the plant on July 13, or within 14 days after. The shutdown will put the jobs of 286 workers on the line, the Tribune relates.

The employees and the city's economic officials have learned about the closure only recently.

About Plastech Engineered

Based in Dearborn, Michigan, Plastech Engineered Products, Inc. --http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. Itdesigns and manufactures blow-molded and injection-molded plasticproducts primarily for the automotive industry. Plastech'sproducts include automotive interior trim, underhood components,bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company,and Toyota, as well as Johnson Controls, Inc.

Plastech is a privately held company and is the largest family-owned company in the state of Michigan. The company is certifiedas a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in themidwestern and southern United States. The company's products aresold through an in-house sales force.

An Official Committee of Unsecured Creditors has been appointed inthe Debtors' cases.

As of Dec. 31, 2006, the company's books and recordsreflected assets totaling $729,000,000 and total liabilities of$695,000,000.

PQ CORP: Moody's Rates Corp. Family B2, Outlook Stable------------------------------------------------------Moody's Investors Service assigned a B2 corporate family rating to PQ Corporation and assigned a B2 rating to its first lien revolving credit facility, a B2 rating to its first lien term loan and a B3 rating to its second lien credit facility. The rated debt has financed the July 2007 acquisition of PQ by funds associated with The Carlyle Group and will finance PQ's acquisition of the Ineos Silicas business. The ratings outlook is stable. The ratings are summarized below.

On July 30, 2007, PQ was purchased by Carlyle Partners IV, LP, a private investment fund affiliated with The Carlyle Group, from CCMP Capital Advisors, LLC. PQ is in the process of acquiring the Ineos Silicas business in a transaction expected to close in the second quarter of 2008. The rated debt provides financing for both transactions, with the Ineos Silicas acquisition being primarily financed with a second draw under the existing first lien term loan.

The B2 corporate family rating reflects PQ's elevated leverage, a revenue base that is expected to be less than initial debt levels, integration risk associated with a new acquisition and initially weak credit metrics. The ratings are supported by the company's stable inorganic chemicals, catalysts and engineered glass materials businesses with leading market positions and a history of steady revenue growth. Earnings stability is provided by the company's diverse end markets, a large customer base and geographically diverse operations. PQ has high margins for its credit rating category and is expected to maintain or improve same, despite a rising raw material pricing environment.

The stable outlook reflects the expectation that PQ will generate sufficient cash flow to meet its debt service obligations and de-lever. Moody's expects PQ's strong market positions, established customer relationships and ability to maintain its margins will support free cash flow generation. The rating currently has limited upside in the near-term given the significant amount of leverage the firm has taken on. The rating could come under downward pressure if the company fails to maintain its margins, generate free cash flow as expected to support repayment of debt, and successfully integrate the Ineos Silicas business, including realization of synergies.

PREMD INC: March 31 Balance Sheet Upside-Down by C$5 Million------------------------------------------------------------PreMD Inc.'s balance sheet at March 31, 2008, showed total assets of C$3 million and total liabilities of C$8 million, resulting in a total shareholders' deficiency C$5 million.

The consolidated net loss for the three months ended March 31, 2008 was $1.6 million compared with a loss of C$1.5 million for the quarter ended March 31, 2007.

As at March 31, 2008, PreMD had cash, cash equivalents and short-term investments totaling C$1.3 million compared to C$1.1 million as at Dec. 31, 2007.

To date, the company has financed its activities through product sales, license revenues, the issuance of shares and convertible debentures and the recovery of provincial ITCs.

On March 12, 2008, the company issued, by way of private placement, C$1,435,294 senior unsecured debentures maturing on Sept. 12, 2009, and 5,072,395 common share purchase warrants for gross proceeds of approximately C$1,220,000.

Each common share purchase warrant expires in March 2013 andentitles the holder to acquire on common share at a price of C$0.2759 per share.

Paul Davis is Named to the Board

PreMD is also appointing Paul Davis as a new member of the board of directors. Mr. Davis has held senior executive positions in both public and private companies and in investment banking, and has served on several boards of directors.

Mr. Davis began his career at Davies, Ward & Beck, a predecessorto Davies Ward Phillips & Vineberg LLP, and was also the chief operating officer and a director of MedcomSoft Inc. and executive vice president and director, Investment Banking of Octagon Capital Canada Corporation.

Mr. Davis will be replacing Ron Henriksen, who is not standing for re-election to PreMD's board of directors at our upcoming annual meeting.

"We look forward to working with Paul Davis as a new addition to our board of directors," Dr. Norton said. "We also thank Mr. Henriksen for his valuable contributions during his years of service to PreMD and wish him success in his future endeavors."

About PreMD Inc.

Headquartered in Ontario, Canada, PreMD Inc. (TSX: PMD; Amex: PME) -- http://www.premdinc.com/-- is a predictive medicine company focused on improving health outcomes with non or minimally-invasive tools for the early detection of life-threatening diseases, particularly cardiovascular disease and cancer. The company's products are designed to identify those patients at risk for disease. With early detection, cardiovascular disease and cancer can be effectively treated, or perhaps, prevented altogether. PreMD is developing accurate and cost-effective tests designed for use at the point of care, in the doctor's office, at the pharmacy, for insurance testing and as a home use test.

Going Concern Doubt

Ernst & Young LLP expressed substantial doubt about PreMD Inc.'s ability to continue as a going concern after auditing PreMD Inc.'s financial results for the year ended Dec. 31, 2007. The auditors pointed to the company's loss of C$6.3 million and shareholders' deficiency of C$4,419,890. The auditors also related that the company has experienced significant operating losses and cash outflows from operations since its inception. The company has operating and liquidity concerns due to its significant net losses and negative cash flows from operations.

PROGRESSIVE GAMING: Posts $8.4 Million Net Loss in 2008 1st Qtr.----------------------------------------------------------------Progressive Gaming International Corporation reported last week results for the first quarter period ended March 31, 2008.

The company posted a net loss of $8.4 million for the first quarter ended March 31, 2008, compared with a net loss of $8.7 million in the same period last year.

For the quarter ended March 31, 2008, the company recorded charges totaling $1.4 million, representing additional provisions for doubtful receivables of the former slot and table games operations (which were disposed of during the second half of 2007), additional accruals for table-games related royalties, and legal fees. For the quarter ended March 31, 2007, the company recorded operating losses of $1.3 million associated with the company's slot and table games segment prior to disposal.

Systems revenues for the quarter ended March 31, 2008, were $15.2 million, representing growth of $507,000, or 3.0%, over the first quarter of 2007. The improvement in systems revenues was due primarily to increased demand for the company's table management systems, partially offset by lower sales of electronic hardware and intellectual property license revenues.

Gross profit increased to $7.3 million, or 48.2% of revenues, during the first quarter of 2008, from $7.0 million, or 47.9% of revenues, for the first quarter of 2007.

Selling, general and administrative expenses increased $1.1 million to $8.7 million during the three months ended March 31, 2008, compared to the same period in 2007.

Research & Development expensesincreased by $700,000 to $3.2 million compared to $2.5 million for the same period in 2007.

Depreciation and amortization expense for the first quarter of 2008 was $1.9 million compared to $1.7 million during the first quarter of 2007.

Interest expense primarily includes interest costs and amortization of debt issuance costs from the company's 11.875% Senior Secured Notes due 2008 and the company's former senior secured term credit facility. Net interest expense for the first quarter of 2008 was $964,000, representing a decrease of 65.0% or $1.8 million compared to the same period in 2007.

The decrease is attributable primarily to a decrease of $18.6 million in outstanding borrowings under the company's former credit facility and a $15.0 million decrease in principal outstanding on the company's Senior Secured Notes due 2008, compared to March 31, 2007 balances. In addition, interest income increased year over year by approximately $200,000 as a result of higher cash balances held in interest-bearing accounts.

For the quarter ended March 31, 2008, the company recognized a tax benefit of $508,000 related to its foreign operations. For the quarter ended March 31, 2007, the company did not recognize a tax benefit or provision due to the company's net operating loss position.

Progressive Gaming also announced that it intends to retire the remaining portion of its 11.875% Senior Secured Notes due in August 2008 with proceeds from an expected strategic technology investment and new bank credit facility (both of which the company intends to finalize shortly).

Commenting on the results, Progressive Gaming International Corporation president and chief executive officer, Russel McMeekin, stated, "Our 2008 first quarter systems installation growth is consistent with our expectations in what is historically our seasonally slowest period. We remain on plan, and expect to achieve, our full year revenue, systems installations and gross margins targets.

"Since positioning the company in 2007 to focus exclusively on the high-margin revenue opportunities associated with our slot and table management systems offerings, we have significantly and consistently increased the penetration of these products in key markets such as Europe, Asia and Canada. Additionally, we have recently expanded into Latin America where we currently have $3.0 million of backlog in contracts year-to-date with significant future potential in this rapidly growing region.

Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed$125.2 million in total assets, $61.4 million in total liabilities, and $63.8 million in total stockholders' equity.

The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $42.5 million in total current assets available to pay $53.2 million in total stockholders' equity.

As reported in the Troubled Company Reporter on March 28, 2008, Ernst & Young, in Las Vegas, expressed substantial doubt about Progressive Gaming International Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007.

The auditing firm reported that the company has experienced recurring operating losses, has an accumulated deficit and negative working capital. In addition, the company's senior secured notes are due in August 2008 and are classified as current as of Dec. 31, 2007, and the company currently does not have sufficient cash to completely redeem the outstanding senior secured notes.

The company said it intends to refinance its $30.0 million Senior Secured Notes through a strategic technology investment together with a bank facility. The company said that these transactions are expected to be completed on or before July 31, 2008.

About Progressive Gaming

Headquartered in Las Vegas, Progressive Gaming International Corporation (Nasdaq: PGIC) -- http://www.progressivegaming.net/-- is a supplier of integrated casino and jackpot management system solutions for the gaming industry worldwide. Products include multiple forms of regulated wagering solutions in wired, wireless and mobile formats.

PROPEX INC: Court Extends Plan-Filing Deadline Until August 21--------------------------------------------------------------The Honorable John C. Cook of the U.S. Bankruptcy Court for the Eastern District of Tennessee extends the time by which Propex Inc. and its debtor-affiliates have:

(a) the exclusive right to propose a plan of reorganization through Aug. 21, 2008; and

(b) the exclusive right to solicit acceptances for that plan through Oct. 20, 2008.

The Debtors originally sought an extension of their Exclusive Plan Filing Period through October 2008, and an extension of their Exclusive Solicitation Period through December 2008.

The Debtors had told the Court that they have made considerable progress in laying the foundational groundwork necessary for their reorganization. However, they need more time to formulate a consensual plan of reorganization.

The Court will hold a hearing on Aug. 20, 2008, to consider a request for further extension of the Exclusive Periods, if requested by the Debtors.

PSIVIDA LIMITED: Posts $5.5 MM Net Loss in 3rd Qtr. Ended March 31------------------------------------------------------------------pSivida Limited posted a net loss of $5.5 million for the third quarter ended March 31, 2008, compared with a net loss of $12.2 million in the same period ended March 31, 2007.

Revenue increased by $173,000, or 47.0%, to $542,000 for the three months ended March 31, 2008, from $369,000 for the three months ended March 31, 2007. The increase was primarily attributable to $426,000 of revenue recognized in connection with the amended collaboration agreement with Alimera consummated on March 14, 2008, partially offset by a $220,000 decrease in royalty income payable to the company by Bausch & Lomb on its sales of Retisert.

Research and development decreased by approximately $1.5 million, or 30.0%, to approximately $3.6 million for the three months ended March 31, 2008, from approximately $5.2 million for the three months ended March 31, 2007.

Selling, general and administrative costs increased by approximately $1.5 million, or 72.0%, to approximately $3.5 million for the three months ended March 31, 2008, from approximately $2.1 million for the three months ended March 31, 2007.

This increase was primarily attributable to an increase of approximately $1.0 million in legal fees, primarily related to (a) the company's proposal to reincorporate in the United States and (b) collaboration agreements; and an increase of approximately $275,000 in share-based payments expense, primarily due to the effect of prior year period forfeitures.

Change in fair value of derivative represented income of approximately $1.2 million for the three months ended March 31, 2008, compared to expense of approximately $6.7 million for the three months ended March 31, 2007.

For the three months ended March 31, 2008, the change in fair value of derivative was related to warrants issued in financing transactions denominated in Australian dollars and resulted in income of approximately $1.2 million primarily due to a decrease in the market price of the company's ordinary shares during that period.

For the three months ended March 31, 2007, the change in fair value of derivative consisted of approximately $4.5 million of expense related to the embedded conversion features of the company's convertible notes, which were redeemed in full prior to June 30, 2007; and approximately $2.2 million of expense related to warrants issued in financing transactions denominated in Australian dollars.

Interest income increased by approximately $59,000, or 95.0%, to $121,000 for the three months ended March 31, 2008, from $62,000 for the three months ended March 31, 2007. This increase was attributable to (i) interest earned on cash equivalent balances resulting from the July 2007 share issue and (ii) interest accrued on the $1.5 million note receivable due April 2008 in connection with the April 2007 sale of the company's former subsidiary, AION Diagnostics Limited, to GEM Global Yield Fund, the principal and interest of which has not been paid and is overdue.

Interest and finance costs were $206,000 for the three months ended March 31, 2008, compared to approximately $2.0 million for the three months ended March 31, 2007.

The decrease in interest and finance costs of approximately $1.8 million was primarily attributable to the absence in the current period of (i) approximately $370,000 of interest expense and approximately $1.3 million of amortization of debt discount and issue costs in connection with convertible notes which were subsequently redeemed prior to June 30, 2007, and (ii) approximately $147,000 of registration rights delay penalties.

Deferred income tax benefit decreased to $15,000 for the three months ended March 31, 2008, from $3.5 million for the three months ended March 31, 2007. The primary reason for the smaller benefit in the current period is that since June 30, 2007, valuation allowances have been required to offset essentially all net operating loss carryforwards created during the current period, which was not the case for the earlier period.

Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed$115.9 million in total assets, $26.7 million in total liabilities, and $89.2 million in total stockholders' equity.

Deloitte Touche Tohmatsu, in Perth Australia, expressedsubstantial doubt about pSsivida Limited's ability to continue asa going concern after auditing the company's consolidatedfinancial statements for the year ended June 30, 2007. The auditing firm ponted to the company's recurring losses fromoperations and negative cash flows from operations.

In its report on Form 10-Q for the three months ended Dec. 31, 2007, the company disclosed that it had limited sources of ongoing revenues and that it would need to raise additional cash through (a) non-dilutive collaboration development partnerships or (b) sales of equity or debt capital in future periods.

As a result, however, of cash consideration received by the company pursuant to the March 14, 2008 amendment of its license and collaboration agreement with Alimera Sciences Inc., the company currently believes that its cash and cash equivalents at March 31, 2008, together with expected payments and funding of research and development in connection with the company's agreements with Alimera and Pfizer Inc., will be sufficient to fund the company's operations under its current operating plan through at least June 30, 2010. Accordingly, the company does not believe that it will be required to raise additional cash within the next year to continue as a going concern.

About pSivida Ltd.

pSivida Limited (Nasdaq: PSDV) (ASE: PSD) (Frankfurt: PSI) -- http://www.psivida.com/-- is a global drug delivery company committed to the biomedical sector and the development of drug delivery products.

Retisert(R) is FDA approved for the treatment of uveitis. Vitrasert(R) is FDA approved for the treatment of AIDS-related CMV Retinitis. Bausch & Lomb owns the trademarks Vitrasert(R) and Retisert(R). pSivida has licensed the technologies underlying both of these products to Bausch & Lomb. The technology underlying Medidur(TM) for diabetic macular edema is licensed to Alimera Sciences and is in Phase III clinical trials. pSivida has a worldwide collaborative research and license agreement with Pfizer Inc. for other ophthalmic applications of the Medidur(TM) technology (excluding FA).

pSivida's intellectual property portfolio consists of 64 patent families, 113 granted patents, including patents accepted for issuance, and over 280 patent applications. pSivida conducts its operations from Boston in the United States, Malvern in the United Kingdom and Perth in Australia.

PYXIS ABS: Moody's Junks Ratings on Four Classes of Notes---------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Pyxis ABS CDO 2006-1 Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

QUEBECOR WORLD: Wants Schedules Filing Period Extended to July 18 -----------------------------------------------------------------Quebecor World Inc. and its debtor-affiliates asked the U.S. Bankruptcy Court for the Southern District of New York to extend until July 18, 2008, their deadline to file their schedules of assets and liabilities, schedules of current income and expenditures, schedules of executory contracts and unexpired leases, and statements of financial affairs.

Michael J. Canning, Esq., at Arnold & Porter LLP, in New York, tells the Court that the Debtors will still not be in a position to file the Schedules and Statements by June 4, 2008, given the size of their Chapter 11 cases, and the volume of material that must be compiled and reviewed by their limited staff.

Mr. Canning informs the Court that the Debtors' records reflect as many as 22,000 parties potentially holding claims or otherwise will be identified on their Schedules and Statements. It is an extensive undertaking to gather all of information related to each creditor and the nature of its claim, and to make the requisite judgments regarding how to properly schedule each potential claim, Mr. Canning says.

About Quebecor World

Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, wellas print solutions to retailers, branded goods companies,catalogers and to publishers of magazines, books and otherprinted media. It has 127 printing and related facilitieslocated in North America, Europe, Latin America and Asia. Inthe United States, it has 82 facilities in 30 states, and isengaged in the printing of books, magazines, directories, retailinserts, catalogs and direct mail.

The company has operations in Mexico, Brazil, Colombia, Chile,Peru, Argentina and the British Virgin Islands.

Quebecor World and 53 of its subsidiaries, including those inCanada, filed a petition under the Companies' CreditorsArrangement Act before the Superior Court of Quebec, CommercialDivision, in Montreal, Canada, on Jan. 20, 2008. The HonorableJustice Robert Mongeon oversees the CCAA case. Francois-DavidPare, Esq., at Ogilvy Renault, LLP, represents the Company inthe CCAA case. Ernst & Young Inc. was appointed as Monitor.

Based in Corby, Northamptonshire, Quebecor World PLC --http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines,catalogues and specialty print products for marketing andadvertising campaigns. The company employs around 290 people.Quebecor PLC was placed into administration with Ian Best andDavid Duggins of Ernst & Young LLP appointed as jointadministrators effective Jan. 28, 2008.

The company has until May 20, 2008, to file a plan ofreorganization in the Chapter 11 case. The Debtors' CCAA stayhas been extended to July 25, 2008. (Quebecor World BankruptcyNews, Issue No. 16; Bankruptcy Creditors' Service, Inc.,http://bankrupt.com/newsstand/or 215/945-7000)

* * *

As reported in the Troubled Company Reporter-Europe on Feb. 13,2008 Moody's Investors Service assigned a Ba2 rating to theUS$400 million super priority senior secured revolving term loanfacility of Quebecor World Inc. as a Debtor-in-Possession. Therelated US$600 million super priority senior secured term loanwas rated Ba3 (together, the DIP facilities). The RTL's betterasset value coverage relative to the TL accounts for theratings' differential.

RADIAN GROUP: Amendment to Credit Agreement Now Effective---------------------------------------------------------Radian Group Inc. (NYSE: RDN) said last week that it has satisfied all outstanding closing conditions of the first amendment to its revolving credit facility. The amendment permanently eliminates the ratings covenant included in the original facility and provides Radian with greater flexibility with respect to the minimum net worth that it must maintain.

In return, Radian agreed to certain other conditions and covenants, including to secure the facility and reduce the commitment size from $400 million to $250 million, with further reductions to $150 million to take place if certain repayment events occur. The bank group remains unchanged with Key Bank continuing to serve as agent.

As reported by the Troubled company Reporter on April 11, 2008, Radian Group Inc. entered into a waiver agreement with its lendersunder its credit facility. The agreement provides for a suspension of the ratings covenant included in such creditfacility. The waiver was also intended to provide sufficient time to discuss the terms of a definitive amendment to the facility.

REALOGY CORP: S&P Foresees Positive Results, Likely to Hold Rating------------------------------------------------------------------Standard & Poor's Ratings Services said that its rating and outlook for Realogy Corp. (B/Negative/--) would not be immediately affected by the expectation that the company's senior secured credit facility leverage covenant cushion would narrow further in the June 2008 quarter. This is because S&P believes that Realogy will produce positive cash flow generation the second half of 2008 and significantly reduce its revolver borrowings during the period, thereby likely avoiding violating the covenant for the remainder of the year.

The most important current component of Realogy's liquidity profile continues to be its $750 million senior secured revolver. On May 12, 2008, borrowings under the revolver were $340 million, mostly due to its usage for payment of $239 million in interest expense on the company's notes and its senior secured credit facility. Senior secured leverage (as measured by Realogy's bank facility) was 4.2x at March 2008, and S&P estimate the measure is trending toward the low-5x area for the June 2008 quarter, compared with the 5.6x covenant. The covenant steps down to 5.35x on Sept. 30, 2008.

Still, operating trends are troubling. In the March 2008 quarter, the pace of declines in transaction sides was down 25% in the company's franchise group, and prices were down 7%. Transaction sides were down 27% in the company's owned brokerage business, and prices were down 1%. However, Realogy has only modest term loan amortization, no meaningful maturities until 2013, and has indicated that it intends to exercise its option in October 2008 to elect to pay interest in kind (at a premium) on its $550 million senior unsecured PIK toggle notes due 2014.

S&P's negative outlook at the current 'B' rating reflects its concern that in the event a recovery in the U.S. residential real estate market is not achieved before early 2009, Realogy may face EBITDA declines that exceed the low-teens percentage area and experience a meaningfully reduced cushion in its senior secured leverage covenant. In the event the industry is not solidly tracking toward recovery by the beginning of the September 2008 quarter, the rating could be lowered.

In the event Realogy exercises its right to cure any potential covenant related default through the contribution of equity by its owner (Apollo Management L.P.) to the company in an amount sufficient to cure the breach, this would be consistent with at least a one-notch downgrade since it would speak to the company's inability to independently support its capital structure. The cure is only available in three of any four consecutive quarters.

"The rating action reflects the company's discretionary decision to not declare or pay dividends on the April 15, 2008, dividend date because of its financial conditions," explained Standard & Poor's credit analyst Robert A. Hafner. The company does not expect to declare or pay dividends on the July 2008 dividend date and also cautioned that under the terms of the issue, it might be precluded from declaring or paying dividends on the Oct. 15, 2008, dividend date.

The Troubled Company Reporter said on April 3, 2008, that Mr. Grede sought authority from the U.S. Bankruptcy Court for the Northern District of Illinois to further extend the time within which the former executives may answer the charge filed by Mr. Grede since both parties have almost reached a settlement payment for a litigation dispute.

As reported in the TCR on Oct. 16, 2007, Mr. Grede filed the suit against founders and executives of Sentinel, including founder Philip Bloom and son Eric, as well as former trader Charles Mosley. Among the charges raised by the Trustee are breach of fiduciary duty, knowing participation in breach of fiduciary duty, and unjust enrichment.

According to the Trustee's complaint, Sentinel's insiders perpetrated a long-term and massive fraud against the Debtor and its customers through a pattern of criminal conduct. The defendants, among other things, improperly transferred at least $20 million through "bogus" fees, bonuses, dividends, account withdrawals, salaries and false payments.

In February 2008, the TCR said that the Hon. John H. Squires gave Mr. Bloom more time to settle allegations of fraud against him. Mr. Bloom had earlier requested the Court to dismiss a lawsuit against him for alleged preferential and fraudulent transfers and damages. In an effort to avoid unnecessarily expending time and resources, Mr. Bloom and the Chapter 11 Trustee that filed the lawsuit both agreed to temporarily suspend further litigation and instead focus efforts on potential settlement.

Based on WSJ's report, the Blooms agreed to pay $10.7 million, representing "all the assets of the settling defendants," as shown in court documents.

The Court is set to consider approval of the settlement agreement between the parties on June 9, 2008, WSJ says.

Proceeds of the settlement will be distributed to Sentinel's creditors under a liquidation plan filed by Mr. Grede. The TCR reported on May 16, 2008, that administrative claims, the Bank of New York's claims and other tax claims will get 100% recovery; holders of $1.2 billion customer claims will get between 35% to 71% recovery; and holders of $10 million unsecured claims will get pro-rata distribution.

As reported in the Troubled Company Reporter on Dec. 19, 2007,the Court extended, until June 13, 2008, the Debtor's exclusiveperiods to file a Chapter 11 plan of reorganization and disclosurestatement.

According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying portfolio and the placement under review for possible downgrade of the Lehman Brothers ABS Enhanced LIBOR Fund's MR1 market risk rating.

SHERWOOD FUNDING: Moody's Lowers Ratings on Three Notes to B1-------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Sherwood Funding CDO, Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

SIGNALIFE INC: Receives Second Amex Deficiency Letter-----------------------------------------------------Signalife Inc. received a second deficiency letter from the American Stock Exchange on May 14, 2008.

On January 7, 2008, Signalife received a deficiency letter from the American Stock Exchange pursuant to which it advised that Signalife would need to comply with AMEX's $6 million stockholders' equity threshold required for continued listing under AMEX Rule 1003(a)(iii). This notification was triggered by the decline of Signalife's market capitalization to less than $50 million, which previously exempted Signalife from meeting the minimum stockholders' equity requirement.

In response to the letter, Signalife submitted to AMEX for its review and acceptance a plan to bring the company into compliance with the aforesaid stockholders' equity requirement. On March 20, 2008, AMEX notified Signalife that it accepted the company's plan of compliance and granted the company an extension until May 7, 2009 to regain compliance with the aforesaid stockholders' equity requirement. On May 14, 2008, Signalife received a second deficiency letter from the American Stock Exchange pursuant to which it advised that Signalife would also need to comply with AMEX's $4 million stockholders' equity threshold required for continued listing under AMEX Rule 1003(a)(ii).

In that letter, AMEX advised Signalife that should it desire to do so, the company could supplement its pending plan of compliance to address this new deficiency. Signalife believes that its pending plan of compliance will have equal applicability to the new deficiency cited, and has notified AMEX that it will be supplementing its pending plan of compliance to address this new issue. No guarantee can be given that AMEX will accept the plan as supplemented or that Signalife will be able to so increase its stockholders' equity to the $4 million threshold within the period stipulated by AMEX, either of which would lead to a delisting of Signalife's common shares from the AMEX market.

Lee B. Ehrlichman Appointed to Board

Signalife appointed Mr. Lee B. Ehrlichman to the company's board of directors on May 10, 2008. Mr. Ehrlichman was also appointed as the company's Director of Operations.

Mr. Ehrlichman, who pioneered outpatient realtime cardiac telemetry technology and call center monitoring as CEO and President of Cardiac Telecom Corporation, will oversee all company operations as the company's Operations Director, a consulting position, including monitoring all production activities and ensuring timely deliveries of product, and overseeing regulatory and research & development activities.

As Operations Director, Mr. Ehrlichman is expected to operateout of the company's Los Angeles offices and laboratory facilities on a full-time basis. Mr. Ehrlichman, who has extensive experience in product marketing and sales, will also take a lead role in company sales, both in the remote cardiac monitoring market as well as traditional ECG markets. Mr. Ehrlichman commenced consulting for the company on May 5, 2008, and it is anticipated that Mr. Ehrlichman will transition to a senior executive level position after a trial period.

Mr. Ehrlichman has extensive experience not only as a chief executive officer and a sales and marketing executive, but also in the cardiac business in which Signalife competes. From August 1995 until July 2007, Mr. Ehrlichman was Chairman, Chief Executive Officer and President of Cardiac Telecom Corporation, a pioneer of outpatient real-time cardiac telemetry technology and call center monitoring.

In that capacity, Mr. Ehrlichman oversaw both the development and commercialization of ECG devices and the heart monitoring business, growing revenues by 500%; developing and executing FDA strategy, including leading clinical trials and obtaining FDA 510(k) clearance in minimal time; leading the rollout of product into the marketplace with successful patient applications to physicians on a nationwide basis (AFib, post-CABG, Drug Titration, Syncope, and Pediatrics); overseeing product manufacturing functions; and negotiating with Medicare and other insurers (at medical director level) to write specific reimbursement policies for Cardiac Telecom's a new technology, which led to reimbursement and cash flow.

Prior to that position, Mr. Ehrlichman was Chairman, Chief Executive Officer and President of Tartan, Inc., a defense industry-oriented embedded systems software tools company, from January 1990 to June 1995. While at Tartan, Mr. Ehrlichman reversed ten years of consecutive losses into profitability in his first year; grew company revenues from $1.5 million to$10 million while self funding diversification into new markets; created a highly effective management team which consistently met or exceeded company goals by recruiting several senior level executives in Sales, Marketing and Engineering (many of these executives are now successful CEOs of technology companies); diversified into embedded Digital Signal Processor markets(military and commercial), which resulted in revenue increases of more than 300% over the first three years; and developed profitable business relationships with top semiconductor manufacturers at senior levels.

Earlier in his career, Mr. Ehrlichman was also Vice President of Sales of Alsys, Inc. for five years, and held various progressive positions in sales, sales management, marketing and marketing management, including Marketing Manager of the Japanese Business Development Group, of Data General Corporation for seven years.

About Signalife

Signalife, Inc. (Amex: SGN) -- http://www.signalife.com/-- is a life sciences company focused on the monitoring, detection and prevention of disease through continuous biomedical signal monitoring. Signalife uses its patented signal technology to design and develop medical devices, therapies and/or technologies that simplify and reduce the costs of cardiovascular disease. Signalife, Inc. is traded on the American Stock Exchange under the symbol SGN.

"The CreditWatch placement is based on the company's announcement that it has offered to purchase the majority of its three senior note issues at a discount of their par value," explained Standard & Poor's credit analyst Hal Diamond.

Standard & Poor's also lowered its preferred stock rating on Six Flags to 'D' from 'CC' because the company did not pay its May 15, 2008 dividend.

S&P also affirmed the 'CCC+' corporate credit rating on Six Flags Theme Parks Inc. and the 'B' bank loan rating on the company's $1.125 billion in secured financing. The recovery rating remains '1', indicating S&P's expectation of very high (90%-100%) recovery in the event of a payment default.

At the same time, Standard & Poor's assigned ratings to Six Flags Operations Inc.'s 400 million 12.25% senior notes due 2016. The notes are rated 'CCC', and a '5' recovery rating was assigned, reflecting expectations of modest (10%-30%) recovery for unsecured lenders in a payment default.

Six Flags' subsidiary, Six Flags Operations Inc, intends to issue up to $400 million of the 12.25% senior notes in the exchange. The transaction would extend debt maturities and reduce near-term refinancing risk, primarily for its $280 million senior notes due Feb. 1, 2010. The transaction, while slightly reducing debt leverage, would not materially alter interest expense.

Should the tender transaction be completed as planned, S&P would lower the corporate credit rating on Six Flags Inc. to 'SD' (selective default) and the issue-level ratings on the exchanged senior notes to 'D', and remove the ratings from CreditWatch. Standard & Poor's would consider the completion of the exchange to be tantamount to a default, because the total value of the proposed notes from the exchange offer will be less than the par value of the existing notes. While a payment default will not have occurred under the legal provision of the notes, Standard & Poor's considers a default to have occurred when a payment related to an obligation is not made in accordance with the original terms (even with investor agreement) and when the nonpayment is a function of the borrower being under financial stress.

Following a successful completion of the exchange offer, S&P could raise the corporate credit rating on Six Flags Inc. to 'CCC+' from 'SD' and the rating on its senior note issues to 'CCC-' from 'D'. This would reflect the company's thin liquidity, high debt leverage, and negative discretionary cash flow, despite the easing of near-term refinancing pressures.

S&P will monitor the progress of the tender offer in order to resolve the CreditWatch listing.

SKYBOX CDO: Moody's Chips Ratings on Credit Quality Deterioration-----------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Skybox CDO, Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

SOUTH COAST: Moody's Junks Aa3 Swap Rating, to Undertake Review---------------------------------------------------------------Moody's Investors Service has downgraded and left on review for further possible downgrade the ratings on these notes issued by South Coast Funding IX Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

SPACEHAB INC: Posts $834,000 Net Loss in Fiscal 2007 Third Quarter------------------------------------------------------------------SPACEHAB Incorporated posted a third quarter fiscal 2008 net loss of $834,000, on revenue of $6.6 million compared with a third quarter fiscal 2007 net loss of $1.2 million, on revenue of $12.2 million.

During the quarter, the company's Astrotech Space Operations subsidiary won three fully funded task orders under the NASA Vandenberg Air Force Base (VAFB) indefinite delivery, indefinite quantity contract, awarded in June 2007. The company is providing facilities and payload processing services, from its VAFB location, in support of NASA's Ocean Surface Topography Mission/Jason-2, Interstellar Boundary Explorer (IBEX) spacecraft, and the Orbiting Carbon Observatory mission, all scheduled for launch in 2008.

Nine Months Results

SPACEHAB's net loss for the nine months ended March 31, 2007, was $34.5 million, on revenue of $19.5 million, which included $30.2 million of non-cash debt conversion expense upon consummation of the exchange of its Convertible Subordinated Notes, Senior Convertible Notes, and Series B convertible preferred stock into shares of common and preferred stock, compared to a net loss of $3.1 million, on revenue of $39.9 million for first nine months of the prior fiscal year.

In October 2007, SPACEHAB successfully exchanged $7.4 million of its 8.0% convertible notes due October 2007, $46.1 million of its 5.5% convertible notes due October 2010 and its 1.3 million shares of Series B convertible preferred stock for 32.6 million shares of common stock and 61,550 shares of new Series C convertible preferred stock. In November 2007, the company converted the Series C convertible preferred stock into 89.9 million shares of common stock and affected a 1 for 10 reverse split. On Oct. 15, 2007, SPACEHAB redeemed the outstanding $2.9 million of its 8.0% convertible notes for cash at par.

SPACEHAB also recognized $350,000 of alternative minimum tax expense for the three months and nine months ended March 31, 2008. Under U.S. tax rules, the bond exchange transaction completed in November 2007 resulted in taxable income. Although this income was offset by the company's net operating loss, alternative minimum tax was applicable to the transaction. SPACEHAB's operating loss going forward will be restricted under the IRS guidelines resulting from the exchange transaction.

Additionally, during the nine-month period of fiscal year 2008, the company completed performance on its last scheduled space shuttle module mission, STS-118. As a result, the company's revenues were significantly below the first nine months for fiscal year 2007.

Liquidity

Net cash used in operating activities was $8.7 million during the nine months ended March 31, 2008, compared with net cash provided by operating activities of $8.0 million during the same period in fiscal 2006. The significant difference in cash flow primarily reflects the company's net loss which increased to $34.5 million during the nine months ended March 31, 2008, as compared to the net loss of $3.1 million for the nine months ended March 31, 2007.

On March 31, 2008, SPACEHAB's cash and short-term investments were approximately $8.5 million, including restricted cash of $6.5 million. Restricted cash reflects payments in advance of milestones achieved on a contract to upgrade customer-specific pre-launch facilities at the company's VAFB location.

In February 2008, Astrotech, a wholly owned subsidiary of SPACEHAB, entered into a $6.0 million financing facility, consisting of a $4.0 million term loan and a $2.0 million revolving credit facility, with Green Bank, N.A. The new financing facility is part of the company's ongoing financial restructuring strategy providing capital as SPACEHAB pursues its new business opportunities as well as improving overall liquidity.

At March 31, 2008, total debt outstanding was $10.8 million, as compared with $63.3 million at June 30, 2007.

Update of Ongoing Operations

With the conclusion of SPACEHAB's last module mission during the nine month period, SPACEHAB says it has experienced a material decrease in its revenue. However, the company continues to focus its efforts on improving overall liquidity through identifying and pursuing new business opportunities, within the areas of SPACEHAB core competencies, as well as significantly reducing operating expenses.

Astrotech has a long-term contract with United Launch Alliance (ULA), a joint venture company of Lockheed Martin and Boeing, to provide facilities and spacecraft processing services for Atlas V payloads through 2006, with contract options through 2010. Subsequent to quarter end, ULA executed a one-year option extension, valued at $3.1 million, through calendar year 2008.

SPACEHAB Engineering Services continues providing specialized services and products to NASA, and other government customers, including configuration and data management services within NASA's Program Integration and Control contract for the International Space Station.

SPACETECH, the company's space technology transfer and commercial business development subsidiary, has recently reported developments in the areas of microgravity processing - through a partnership with Space Florida and two space shuttle missions carrying a proprietary infectious disease model - and its AirWard Container, currently the only product positioned to go to market that successfully meets the new Federal Aviation Administration CFR 49 regulation regarding thermal and impact resistance requirements.

Balance Sheet

At March 31, 2008, the company's consolidated balance sheet showed$64.2 million in total assets, $28.6 million in total liabilities, and $35.6 million in total stockholders' equity.

Headquartered in Webster, Texas, SPACEHAB Inc. (Nasdaq: SPAB) -- http://www.spacehab.com/-- offers space access and payload integration services, production of valuable commercial products in space, spacecraft pre-launch processing facilities and services, development and extension of space-based products to the consumer market, and program and engineering support ranging from development and manufacturing of flight hardware to large scale government project management.

Going Concern Doubt

PMB Helin Donovan LLP in Houston, Texas, expressed substantialdoubt about Spacehab Inc.'s ability to continue as a goingconcern after auditing the company's consolidated financialstatements for the year ended June 30, 2007. The auditing firmreported that the company has sustained recurring losses andnegative cash flow from operations.

STANDARD PACIFIC: Losses Cue S&P to Junk Subordinated Debt Rating-----------------------------------------------------------------Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Standard Pacific Corp. to 'B-' from 'B+'. At the same time, S&P lowered the subordinated debt rating to 'CCC' from 'B-' and placed all ratings on the company on CreditWatch with negative implications. These actions affect approximately $1.3 billion of unsecured notes.

"The downgrades acknowledge losses from homebuilding operations, large impairment charges that continue to erode shareholder equity and drive up leverage ratios, and constrained borrowing capacity," said Standard & Poor's credit analyst James Fielding. "The CreditWatch placements further reflect financial covenant issues that are still unresolved, as well as uncertainty regarding Standard Pacific's financial strategy and the future direction of this undercapitalized company."

Although Standard Pacific has successfully weathered previous housing cycles and recent cash flow from operations has been positive, the severity and duration of the current downturn raises the likelihood that Standard Pacific will need additional capital to manage through this cycle. The ratings will remain on CreditWatch until we gain more clarity about the company's financing strategies and its credit facility negotiations are resolved.

TIRECRAFT GROUP: Gets Court's Nod on Pneus Unimax's Buyout Offer----------------------------------------------------------------Pneus Unimax Ltee's offer to acquire all of the assets of Tirecraft Group Inc. has obtained the approval of the Court of Queen's Bench of Alberta.

Pneus Unimax made the offer through its subsidiary 4456084 Canada Inc. Subject to certain conditions, the closing of this transaction is planned to occur on May 30, 2008.

"In line with our intention to expand the UNIPNEU banner to Ontario, the acquisition of Tirecraft's assets constitutes astrategic decision that complements our vision of growth," said Rene Gelinas, Pneus Unimax president and CEO, said. "The potential acquisition of Tirecraft is excellent news since by doing so we will penetrate the out-of-Quebec market by acquiring an integrated organization operating in all major cities across Canada."

According to Mr. Gelinas, Pneus Unimax's expertise in distribution was a major consideration in the offer to buy and will prove very useful.

"In our industry, success lies not only on wise technological choices and qualified human resources, but also on sound business practices," he concluded. "These very practices and our proven process based on our solid management culture are precisely what we will be bringing to Tirecraft."

Pneus Unimax has also confirmed its intention to maintain Tirecraft's existing business model, along with the Tirecraft and President banners, the Remington network, and the Canadian Treads plants.

About Pneus Unimax Ltee

Located in Boucherville, Quebec, Pneus Unimax Ltee is a tire distribution network with 86 independent dealers-shareholders operating under the UNIPNEU banner at 135 retail, wholesale, and commercial sales outlets in Quebec and the Maritimes. The company was created in 1979.

About Tirecraft Group Inc.

Based in Sherwood Park, Alberta, Tirecraft Group Inc. operates under the Tirecraft and President banners comprising 330 affiliated dealers. The tire retailer has 48 corporate stores, the Remington network of 22 tire distribution warehouses and four Canadian Treads retreading plants for medium trucks.Approximately 800 employees work at its facilities across Canada.

TRAILER BRIDGE: March 31 Balance Sheet Upside Down by $329,034--------------------------------------------------------------Trailer Bridge, Inc. reported unaudited financial results for the first quarter ended March 31, 2008. Southbound container volume increased 15.1% and total revenue increased 13.3%. Those results were mitigated by the new service startup, continuing fuel price increases and other items.

The first quarter was summarized by southbound vessel utilization of 72.4%, revenue of $30.4 million, an operating ratio of 97.7%, operating income of $692,000 and a net loss of $1.8 million. Startup of the Company's new service is estimated to have incrementally reduced net income by $1.6 million during the first quarter. Net fuel cost increased by $1.0 million. These and other items totaling $0.9 million are recapped in detail below.

John D. McCown, Chairman and CEO, said, "We were very pleased to deliver strong top-line growth driven by a 15.1% increase in southbound container volume and 14.1% rise in related revenue, especially in a soft Puerto Rico freight market. Our core business, our ongoing twice weekly Puerto Rico services, continued to be profitable. Apart from some other items shown below, we were pushed into a loss due to increased fuel costs and investment in the new Dominican Republic/Puerto Rico service. However, March and April results as well as current trends in our new service are encouraging. Fuel increases continued to rise and outpaced fuel surcharge increases. To mitigate this loss we filed various additional fuel surcharges last week that are scheduled to go into effect June 1. We believe that our customers understand and will accept the surcharges."

Total revenue for the three months ended March 31, 2008 was $30.4 million, an increase of 13.3% compared to the $26.8 million reported in the first quarter of 2007. The Company's deployed vessel capacity utilization during the first quarter was 72.4% southbound and 21.6% northbound, compared to 80.3% and 24.6%, respectively, during the first quarter of 2007. The decrease in utilization was largely related to the introduction of the fifth vessel in the Company's new service, which increased capacity by 22.1% southbound compared to the year earlier quarter.

Trailer Bridge reported operating income of $692,000 in the first quarter of 2008, compared with operating income of $3.8 million in the first quarter of 2007. The Company reported a net loss of $1.8 million, or $0.15 per share, for the first quarter of 2008 compared to net income of $1.3 million, or $0.11 per share, in the year earlier period.

Mr. McCown continued, "Trailer Bridge's board and management are focused on delivering the exceptional actual results we demonstrated in the recent past. For the twelve months ended June 2007, the last twelve month period prior to commencement of the new service and consistently increasing fuel prices, Trailer Bridge achieved an operating ratio of 82.9% and earnings of $10.0 million. We remain confident in our proven system and in our ability to meet the challenges of a new startup and the reality of rising fuel costs, a challenge all carriers must meet."

Financial Position

At March 31, 2008, the Company had cash balances of $2.1 million and working capital of $4.6 million. The Company is in compliance with its covenants and has the full amount available on its $10 million revolving credit facility. The company had total assets of $121,373,229 and total liabilities of 121,702,263, resulting in total stockholders' deficit of $329,034.

Summary of Significant Changes in Operating Results

A table listing the main components in the difference in operating results for the first quarter ended March 31, 2008 compared to the year earlier quarter is shown below. The table also includes items that occurred in the first quarter that the company is not typically experiencing in most quarters and are presented as additional information that may be useful.

Trailer Bridge (NASDAQ Global Market: TRBR) -- http://www.trailerbridge.com/-- provides integrated trucking and marine freight service to and from all points in the lower 48 states and Puerto Rico and Dominican Republic, bringing efficiency, service, security and environmental and safety benefits to domestic cargo in that traffic lane. This total transportation system utilizes its own trucks, drivers, trailers, containers and U.S. flag vessels to link the mainland with Puerto Rico via marine facilities in Jacksonville, San Juan and Puerto Plata.

The Troubled Company Reporter reported on April 14, 2008, that Standard & Poor's Ratings Services affirmed its 'B-' long-term corporate credit rating on Trailer Bridge Inc. At the same time, S&P affirmed the 'B-' senior secured debt rating, the same as the corporate credit rating, while leaving the recovery rating unchanged at '3', indicating expectations of a meaningful (50%-70%) recovery in the event of a payment default. The rating outlook remains stable.

TRIBUNE LIMITED: Moody's Cuts Rating on $80MM Notes to B1 from Aaa------------------------------------------------------------------Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Tribune Limited Series 48:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio.

TROPICANA ENTERTAINMENT: Section 341(a) Meeting Set for June 13---------------------------------------------------------------Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, will convene a meeting of creditors in the Chapter 11 cases of Tropicana Entertainment LLC, and its 33 debtor affiliates, at 1:30 p.m., on June 13, 2008, at Room 2112, 2nd Floor, J. Caleb Boggs Federal Building, at 844 King Street, in Wilmington, Delaware.

This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' bankruptcy cases.

The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors.

The Debtors' representative, as specified in Rule 9001(5) of the Federal Rules of Bankruptcy Procedure, is required to appear at the meeting of creditors for the purpose of being examined under oath. Attendance by creditors at the meeting is welcomed, but not required.

At the meeting, the creditors may examine the Debtors' representative and transact other business, as may properly come before a meeting. The meeting may be continued or adjourned from time to time by notice at the meeting, without further written notice to the creditors.

About Tropicana Entertainment

Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largestprivately-held gaming entertainment providers in the UnitedStates. Tropicana Entertainment owns eleven casino properties ineight distinct gaming markets with premier properties in LasVegas, Nevada and Atlantic City, New Jersey.

TROPICANA ENT: U.S. Trustee Picks Seven-Member Creditors Panel--------------------------------------------------------------The U.S. Trustee for Region 3 has appointed seven members to the Official Committee of Unsecured Creditors of the Chapter 11 cases of Tropicana Entertainment LLC, and its 33 debtor affiliates:

Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC --http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largestprivately-held gaming entertainment providers in the UnitedStates. Tropicana Entertainment owns eleven casino properties ineight distinct gaming markets with premier properties in LasVegas, Nevada and Atlantic City, New Jersey.

VERTICAL VIRGO: Moody's Junks Ratings on Three Classes of Notes---------------------------------------------------------------Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Vertical Virgo 2006-1, Ltd.:

According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities.

VERTIS INC: Noteholders Agree to Changes in Forbearance Agreement -----------------------------------------------------------------Vertis Inc. disclosed that the holders of an aggregate of 80% of the outstanding principal amount of its Second Lien Notes agreed to an amendment to a forbearance agreement between them and the company. Under the Forbearance Agreement as amended by the First Amendment, the holders agreed to forbear from exercising their rights and remedies under the indenture governing the Second Lien Notes and from directing the trustee under the indenture from exercising any rights and remedies on the holders behalf until the occurrence of these events:

(i) the failure of a specified percentage of certain note holders having executed a restructuring and lock-up agreement on or before May 20, 2008,

(ii) the termination of the Restructuring Agreement in accordance with its terms,

(iii) the occurrence of certain events under the forbearance agreement dated April 3, 2008 between the company and the lenders under the companys four-year revolving credit agreement, as may be amended,

(iv) the occurrence of certain events under the forbearance agreement dated as of April 2, 2008 by and among Vertis Receivables II, LLC, Webcraft, LLC, Webcraft Chemicals, LLC, Enteron Group, LLC, Vertis Mailing, LLC, the company and General Electric Capital Corporation, as may be amended and

(v) the occurrence of certain other events described in the Forbearance Agreement as amended by the First Amendment.

All other terms of the Forbearance Agreement remain unchanged by the First Amendment.

As reported in the Troubled Company Reporter on May 6, 2008, as part of the strategy of Vertis to preserve and enhance its near-term liquidity, on April 1, 2008, the company elected to forego making a $17.1 million interest payment on its 9-3/4% Senior Secured Second Lien Notes. Under the terms of the indenture governing the Second Lien Notes, the company had a thirty-day grace period in which to make this interest payment before it would be an event of default.

Pursuant to a forbearance agreement dated April 30, 2008, the holders of an aggregate of 77% of the outstanding principal amount of the Second Lien Notes agreed to forbear from exercising their rights and remedies under the indenture governing the Second Lien Notes and from directing the trustee under the indenture from exercising any such rights and remedies on the holders behalf until the occurrence of certain events.

Headquartered in Baltimore, Vertis Inc., doing business as VertisCommunications -- http://www.vertisinc.com/-- is a provider of print advertising and direct marketing solutions to America'sleading retail and consumer services companies.

At Dec. 31, 2007, the company's consolidated balance sheet showed$528.2 million in total assets and $1.403 billion in totalliabilities, resulting in a $875.1 million total stockholders'deficit.

* * *

As reported in the Troubled Company Reporter on April 4, 2008,Deloitte & Touche LLP, in Baltimore, Maryland, expressedsubstantial doubt about Vertis Inc.'s ability to continue as agoing concern after auditing the company's consolidated financialstatements for the years ended Dec. 31, 2007, and 2006. Theauditing firm said that the company has incurred recurring netlosses and is experiencing difficulty in generating sufficientcash flow to meet its obligations and sustain its operations.

As reported in the Troubled Company Reporter on April 3, 2008,Standard & Poor's Ratings Services revised its CreditWatchimplications for its 'CC' corporate credit rating on Vertis Inc. to negative from developing following the company's announcementthat it had engaged a financial advisor to assist in a possibledebt exchange offering.

At the same time, Standard & Poor's lowered its ratings onVertis's $350 million senior secured second-lien notes and$350 million senior unsecured notes to 'C' from 'CCC'. The notesremain on CreditWatch with negative implications, where they wereoriginally placed on April 4, 2007.

VICTORY MEMORIAL: Files Disclosure Statement and Chapter 11 Plan----------------------------------------------------------------Victory Memorial Hospital and its debtor-affiliates delivered to the United States Bankruptcy Court for the Eastern District of New York Disclosure Statement dated May 15, 2008, explaining their Chapter 11 Plan of Reorganization.

Overview of the Plan

The Plan contemplates the liquidation of substantial assets of the Debtors and the payment in full of all allowed secured claims and allowed unsecured priority claims.

On the Plan's effective date, the Debtors will assign all account receivable valued at $9.5 million to the liquidating trust. The proceeds of the accounts receivables will be available for the liquidating trust for distribution under thePlan.

The Plan enables the Debtors to pursue avoidance and other actions in an aggregate amount of at least $14 million. Accordingly, the Debtors will assign to the liquidating trust the exclusive right to commence and to continue the prosecution of all pending avoidance and other actions.

Asset Sale

The Debtors agree to sell the main campus and acquired business, which consists of their skilled nursing facility and long-term home health program, to Dervaal LLC for $44.9 million. The proceeds of the sale will be used to pay the allowed Dormitory Authority of the State of New York (DASNY) Bond claim at closing of the sale, which is expected to occur by Sept. 30, 2008. The remaining balance of the proceeds will be transferred to the liquidating trust.

The Debtors are presently marketing their ancillary real estate to the highest bidder, which is expected to net between $5 million to $8 million. An auction is scheduled to take place on June 27, 2008.

HEAL IV Award

New York Department of Health has committed to provide $25 million HEAL IV Award to the Debtors to finance their closure pursuantto the Berger Recommendations that require the closure of the Debtors' acute-care facility by June 30, 2008, and the continuation of their skilled nursing, ambulatory, and homehealth care programs.

Based in Brooklyn, New York, Victory Memorial Hospital is anon-profit, full service acute care voluntary hospital withapproximately 241 beds and a skilled nursing unit with 150 beds.Victory Hospital provides a full range of medical services with afocus on community care and a program of community outreach to theBrooklyn community. Victory Ambulance Services, Inc. a for-profitsubsidiary, provides Victory Hospital with ambulance services.Victory Pharmacy, Inc., a for-profit subsidiary, does not haveany employees or assets.

The company and its two-subsidiaries filed for chapter 11protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson,Esq., at DLA Piper US LLP, represent the Debtors. Craig E.Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP,represent the Official Committee of Unsecured Creditors. When theDebtors filed for protection from their creditors, they listedassets and debts between $1 million and $100 million.

WELLMAN INC: Receives Additional Extension for Bidding Protocol---------------------------------------------------------------Wellman, Inc. said that the lenders providing its debtor-in-possession financing have granted an additional one-week extension by which the company may have its bidding procedures approved by the Bankruptcy Court. The new deadline is June 5, 2008.

The Company, in consultation with its stakeholders, is continuing to evaluate offers and restructuring alternatives, including a plan of reorganization, in an effort to maximize the value of Wellman's business on a going concern basis. In order to allow the company to maximize value for all of its stakeholders, the DIP lenders have agreed to provide Wellman additional time to continue discussions with interested parties. This does not extend the deadline to complete the sale.

As reported in the Troubled Company Reporter on April 11, 2008, the Court approved the $225,000,000 of DIP Financing from a group of lenders; Deutsche Bank Securities Inc., as lead arranger and bookrunner; Deutsche Bank Trust Company Americas, as administrative agent; JPMorgan Chase Bank, N.A., as syndication agent; and General Electric Capital Corp., LaSalle Business Credit, LLC, and Wachovia Finance Corp., as co-documentation agents. The Credit Agreement dated Feb. 26, 2008, required the Debtors to:

(i) obtain within 90 days after the Petition Date an order from the Bankruptcy Court (a) approving bidding procedures, (b) scheduling bidding deadline, auction date and sale hearing date, and (c) establishing procedures under Sections 364 and 365 of the Bankruptcy Code for the Wellman Sale and the assignment and assumption of certain contracts related thereto;

(ii) obtain an order approving the Wellman Sale by July 31, 2008; and

(iii) close the sale within 15 days of the later of (i) the entry of the Sale Order, and, if a stay of the order is pending, the date the order becomes final and non-appealable, if during the time of the stay, a bond has been issued.

Early last week, the deadline to obtain Court-approval of the bidding procedures was initially extended from May 22 to May 29.

Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]: WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities.

Wellman Inc., in its bankruptcy petition, listed total assetsof $124,277,177 and total liabilities of $600,084,885, as ofDec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG,Inc., listed assets between $500 million and $1 billion on astand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., andWellman of Mississippi Inc., listed assets between $100 millionand $500 million at the time of their bankruptcy filings.

On a consolidated basis, Wellman Inc., and its debtor-affiliateslisted $498,867,323 in assets and $684,221,655 in liabilities asof Jan. 31, 2008.

WHX CORP: March 31 Balance Sheet Upside Down by $74.8 Million-------------------------------------------------------------WHX Corporation released financial results for the first quarter of 2008, reporting a net loss of $6.2 million, on sales of $177.3 million for the three months ending March 31, 2008, compared to a net loss of $8.5 million on sales of $117.8 million for the same period in 2007.

Of the total first quarter's sales increase, $51.0 million was attributable to the acquisition of Bairnco Corporation in April of 2007. Basic and diluted net loss per common share was $0.62 for the first quarter of 2008, compared with basic and diluted net loss per common share of $0.85 in the same period of 2007.

The Company generated Consolidated EBITDA of $10.1 million in 2008, up from $2.3 million in 2007. The Company defines EBITDA as net income before the effects of realized and unrealized losses on derivatives, interest expense, taxes, other income or expense, depreciation and amortization and pension credit.

"We are reasonably pleased with our results for the 2008 first quarter. Excluding our Bairnco acquisition and despite difficult economic conditions in several of our North American markets, WHX generated operating income and EBITDA well ahead of the comparable 2007 quarter," said Glen Kassan, Vice Chairman and Chief Executive Officer of WHX. "I'm confident that the work that we have done in 2007 and into 2008, including the Bairnco acquisition and strengthening our senior management team, has positioned the Company for growth in 2008 and beyond."

As of March 31, 2008, the company had $461.2 million in total assets and $536 million in total liabilities, resulting in stockholders' deficit of $74.8 million.

First Quarter Operating Results

Precious Metal Segment:

Precious Metal Segment sales in the quarter increased by $7.9 million to $45.7 million. The increase resulted primarily from higher precious metal prices, increased market share and new product sales. The Precious Metal Segment contributed $2.4 million to WHX's total operating income in the first quarter of 2008, compared to an operating loss for the segment of $0.3 million in the first quarter of 2007. The 2007 operating results for this segment included losses of $1.2 million from operating facilities that have subsequently been sold.

Tubing Segment:

Tubing Segment sales increased by $0.3 million to $29.6 million. Strong growth in the petrochemical and shipbuilding markets serviced by the Stainless Steel Tubing Group were offset by weakness in the domestic and foreign refrigeration and transportation markets serviced by the Specialty Tubing Group. The Tubing Segment contributed $1.3 million to WHX's operating income of in the first quarter of 2008, compared to an operating loss of $0.9 million in the same period of 2007. The improvement in operating income was principally due to improved operating efficiencies within the North American specialty tubing facilities.

Engineered Materials Segment:

Engineered Materials Segment sales increased by $0.3 million to $51.0 million as weakness in the new home construction market continued to impact the sector. The Engineered Materials Segment contributed $1.3 million to WHX's operating income in the first quarter of 2008, compared to $2.1 million in the same period of 2007. Factors resulting in lower operating income included aforementioned weakness in the domestic housing market and an increase in volume of lower margin private label products.

Bairnco Segments:

Bairnco Corporation was acquired by WHX in April 2007. The three Bairnco Segments (Arlon Electronic Materials (EM), Arlon Coated Materials (CM), and Kasco) generated $51.0 million of net sales in the first quarter of 2008, which contributed $16.1 million to WHX's gross profit and increased the Company's consolidated gross profit percentage by 3.4%. Arlon EM, Arlon CM, and Kasco contributed $1.2 million, ($1.1 million), and $0.8 million, respectively, to the Company's operating profit in the first quarter. Included in operating income within the Arlon EM segment is $0.4 million of amortization expense related to intangibles recorded as part of the purchase price of the WHX acquisition of Bairnco. Also included in operating income are expenses of $0.6 million related to move costs to consolidate the two Arlon CM plants into one plant. In addition to the direct move costs, the results of the quarter were negatively impacted by operating inefficiencies during the move. Management expects that the consolidation of the plants will result in future cost savings and operating efficiencies. Bairnco maintains strong positions in its three business segments and following its acquisition by WHX is executing plans to improve sales, plant level operations and profit margins while reducing working capital.

Other Developments

On October 18, 2007, WHX filed a registration statement on Form S-1 with the Securities and Exchange Commission (the "SEC") for a rights offering to its existing stockholders. WHX filed amendments to the S-1 registration on 11/30/07, 12/21/07 and 4/14/08. The purpose of this rights offering is to raise equity capital in a cost-effective manner that gives all of our stockholders the opportunity to participate. The net proceeds will be used to (i) make partial payments to certain senior lenders, to certain wholly-owned subsidiaries of WHX and/or to contribute to the working capital of such subsidiaries, (ii) redeem preferred stock which is held by Steel Partners, and was issued by a wholly-owned subsidiary of WHX, (iii) purchase shares of common stock of CoSine Communications, Inc. from Steel Partners, (iv) repay WHX indebtedness to Steel Partners, and (v) repay indebtedness of wholly-owned subsidiaries of WHX to Steel Partners. The proposed rights offering, if fully subscribed could provide WHX with gross proceeds of $200 million. While a registration statement relating to these securities has been filed with the SEC, it has not yet become effective.

About WHX Corp.

Based in White Plains, New York, WHX Corporation (Pink Sheets:WXCP) -- http://www.whxcorp.com/-- is a holding company that invests in and manages a group of businesses on a decentralizedbasis. Apart from owning Handy & Harman, WHX acquired inApril 2007 Bairnco Corporation, which is a diversifiedmultinational company that operates business units in threereportable segments: Arlon electronic materials, Arlon coatedmaterials and Kasco replacement products and services.

WORLD HEART: Appeal on Continued Listing in Nasdaq Denied---------------------------------------------------------World Heart Corporation received a NASDAQ Staff Determination Letter stating that the company's requests for continued listing on The NASDAQ Capital Market has been denied.

The NASDAQ noted that the company did not provide a definitive plan evidencing its ability to achieve near term compliance with the continued listing requirements or sustain such compliance over an extended period of time, as required by Marketplace Rule 4310(c)(4) and Marketplace Rule 4310(c)(3), which requires the company to have a minimum of $2.5 million in stockholders' equity or $35 million market value of listed securities or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years.

Accordingly, unless the company requests an appeal of this determination, trading of the company's common stock will be suspended at the opening of business on May 21, 2008, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the company's securities from listing and registration on The NASDAQ Stock Market.

The company may appeal Staff's determination to a NASDAQ Listing Qualifications Panel, pursuant to the procedures set forth in the NASDAQ Marketplace Rule 4800 Series. A hearing request will stay the suspension of the company's securities and the filing of the Form 25-NSE pending the Panel's decision. The request for a hearing, which may either be an oral hearing or a hearing based solely on written submissions, must be received by the Hearings Department no later than 4:00 P.M. Eastern Time, today, May 19, 2008. If the company appeals, the company must also address its failure to comply with the $1 million minimum market value requirement for its publicly held shares, as required by Marketplace Rule 4310(c)(7) for continued listing on the NASDAQ Capital Market. As of May 9, 2008, the MVPHS of the company totaled $857,242.

If the company does not appeal Staff's determination to the Panel, the company's securities will not be immediately eligible to trade on the OTC Bulletin Board or in the "Pink Sheets". The securities may become eligible if a market maker makes application to register in and quote the security in accordance with SEC Rule 15c2-11, and such application is cleared. Only a market maker, not the company, may file a Form 211.

As reported in the Troubled Company Reporter on April 4, 2008,Burr, Pilger & Mayer LLP raised substantial doubt about theability of World Heart Corporation to continue as a going concernafter it audited the company's financial statements for the yearended Dec. 31, 2007. The auditor pointed to the corporation'srecurring losses.

X-RITE INC: Names Dave Rawden as Interim Chief Financial Officer----------------------------------------------------------------Lynn J. Lyall, who had served in X-Rite Inc.'s Chief Financial Officer position since March of 2008, has left the company for personal reasons. X-Rite has named Dave Rawden as interim CFO and does not anticipate any disruptions in ongoing talks with lenders or investors.

Mr. Rawden has held a number of CFO positions in middle market public companies including Exopack Holding and Allied Holdings. In addition, Mr. Rawden has had several experiences successfully managing through situations where refinancing and capital structure changes were appropriate. Mr. Rawden is a CPA and holds a Bachelor of Science Degree in Accounting from Michigan State University. It is expected that Mr. Rawden will remain engaged until a permanent CFO is hired. The company will also expand the role of Brad Freiburger, Vice President and Controller. Mr. Freburger will expand his current responsibilities to include planning and analysis.

"It's crucial for all of our constituencies to understand that I have led and continue to lead all ongoing discussions with our lenders with the assistance of our financial partner, RBC Capital. This change will likely have a positive impact on our current situation given Daves experience," stated Thomas J. Vacchiano, Jr., Chief Executive Officer. "Further, Lynn's resignation is in no way associated with any new issues related to our financial condition or recapitalization efforts. The fit between our needs and Lynns interests just proved to be a poor match. Dave's skills will be a great asset to the Company at this time, and I look forward to working with him as we work through addressing our lender agreements and capital structure needs. I have every confidence in the abilities of our financial team to meet our day-to-day financial management responsibilities."

Tom Vacchiano concluded, "We continue to work diligently with our lenders to address our recent covenant defaults and believe that we will have sufficient cash flow to operate our business and make our scheduled interest payments. We are encouraged by our work with RBC to date and our ongoing discussions with lenders and investors to address our capital needs going forward."

Headquartered in Grand Rapids, Michigan, X-Rite (Nasdaq: XRIT) -- http://www.xrite.com/-- is the world's largest provider of color- measurement solutions, offering hardware, software, colorstandards and services for the verification and communication ofcolor data. The company serves a range of industries, includingimaging and media, industrial color and appearance, retail colormatching, and medical. X-Rite serves customers in more than 100countries from its offices in Europe, Asia and the Americas.

* * *

As reported in the Troubled Company Reporter on May 15, 2008, Moody's Investors Service lowered X-Rite, Inc.'s corporate familyrating to Caa1 from B2. Moody's also lowered the rating on thecompany's first lien senior secured credit facilities to B3 fromB1 and the rating on the second lien term loan to Caa3 from Caa1. All ratings remain under review for possible downgrade. As partof this action, Moody's also affirmed the company's SGL-4speculative grade liquidity rating.

* S&P Sees Looming Problems on Pension Benefits for Retired Worker------------------------------------------------------------------State and local governments, already feeling the fallout from the housing meltdown and the economic slowdown, have another big problem looming: how to pay the pensions and health care benefits for their retired workers. Standard & Poor's Rating Services estimates that just for postemployment benefits, largely composed of health insurance, U.S. states are already on the hook for at least $400 billion--the estimated total future costs for retiree health and other nonpension benefits. Add in pension costs and the figure likely will exceed $1 trillion. "These liabilities will span many years and most governments will effectively manage their obligations," says Standard & Poor's public finance credit analyst Robin Prunty. "But we can also expect to see budget and balance sheet stress for those that do not actively manage their costs."

In "How Will State And Local Governments Handle Their Retirement Benefit Liabilities?," published on Standard & Poor's RatingsDirect on May 16, Ms. Prunty points out the crunch for those states and local governments that don't adequately prepare for this coming cost--which is tied to the growth in medical costs and the rising number of retirees--will not be immediate. "Three to five years down the road," she says, "credit quality for these issuers could be pressured, especially if they are not adequately funded." Few jurisdictions have set aside meaningful amounts to cover nonpension retirement benefits. And while pension funds have traditionally been funded to a much greater degree, the returns they earn are subject to the performance of the assets in which those funds have been invested. Volatile markets, such as the world has seen recently, can play havoc with a government's expected returns.

The adequacy of government funding for postemployment benefits is in the spotlight now as a result of a recent Government Accounting Standards Board mandate that states and local governments publicly disclose those liabilities. While Standard & Poor's considers a government's postemployment liabilities akin to debt--there are often legal or contractual guarantees attached to these obligations--S&P generally treat them differently in its public finance analyses because payments may not be regular and fixed, as with a bond. But these obligations do exist, and jurisdictions across the U.S. are becoming increasingly aware of the cost of paying their retired employees and concerned about how they can prudently do so.

* S&P Says Mng't Sectors Remained Among the More Stable Industry----------------------------------------------------------------In a quarter that saw the downfall of Bear Stearns and unprecedented movements by the Federal Reserve to prevent systemic risk by providing substantial liquidity to the market, the global asset management sector remained among the more stable sectors in the financial services industry, according to a report released by Standard & Poor's Ratings Services titled, "Global Asset Managers' Long-Term Growth Prospects Are Sound, Despite Short-Term Earnings Pressure."

Nevertheless, persistent stress in global credit markets in first-quarter 2008 has heightened pressure on the earnings of the asset managers we rate.

"We continue to believe that the asset manager sector is well poised to benefit from long-term growth, particularly given the current, near unprecedented market environment that, we believe, will result in fundamental changes in investment behavior," said Standard & Poor's credit analyst Diane Hinton. "Changing demographics, ongoing pension reform in many countries, and an acceleration in the shift to defined contribution from defined benefit plans will also continue to underpin long-term growth prospects thanks to new product innovation," added Ms. Hinton.

* BDO Seidman Identifies Risk Factors at 100 Largest Retailers --------------------------------------------------------------Research released by BDO Seidman, LLP, a leading professional services firm, identifies strong competition (90%) and general economic conditions (83%) as the most common risk factors among the 100 largest public U.S. retailers. An increasing concern, as compared to 2007, was the risk associated with international suppliers, reflecting unease over recent product safety issues with China (79% and the 3rd highest risk). Furthermore, while still ranked high on the list, only 70 percent (as compared 84% in 2007) of retailers cited concerns regarding impediments to further U.S. expansion, which may indicate that expansion plans have stalled with retailers focusing on reducing costs in a recessionary environment. Also ranking high is labor risk (62%) and the implementation of technology systems (54%), both of which had a higher frequency percentage this year over last year's results (56% and 50%, respectively).

These are just a few of the findings in The 2008 BDO Seidman RiskFactor Report for Retail Businesses. The report examined the risk factors listed in the most recent SEC filings of the largest 100 publicly traded U.S. retailers; the factors were analyzed and ranked by order of frequency cited.

"As advisors to consumer product and retail businesses, we created the BDO Seidman RiskFactor Report for Retail Businesses to serve as an annual benchmark of the changing concerns of the major public retailers, said Doug Hart, a Partner in BDO Seidman's Retail and Consumer Product practice. "Ultimately, the research shows increased worry over the state of the economy. Concern over the economic malaise is not only cited explicitly as a risk factor, but also in the diminished concern over expansion plans, marketing initiatives, loss of key management and dependency on consumer trends. This reinforces the fact that many retailers are hunkering down for a difficult environment rather than focusing on growth."

Further findings in the 2008 BDO Seidman RiskFactor Report for Retail Businesses:

* Economic Factors Plague Retail. Of the 82 percent of retailers that cited general economic concerns as a risk in 2008, energy and oil was highlighted most frequently (75%), followed by interest rates (55%), employment trends (53%), credit availability (43%), inflation 37%) and the housing market (23%). In 2007, many of the retailers did not include specific economic factors, indicating that these issues were not nearly as pronounced as they are today. Last year, of the 86 percent of the retailers that cited general economic concerns as a risk, energy and oil was the leader (57%), followed by interest rates (44%), employment trends (42%), inflation (38%), credit availability (24%) and the housing market (1%).

* Geopolitical Fallout. Half (51%) of the top 100 retailers declared that terrorism and geopolitical events are viewed as risks, as compared to 44 percent in 2007. This increase is likely related to the confluence of the U.S. being more reliant on emerging economies for raw materials (commodities, oil and natural gas) and the U.S.'s increasingly strained relationship with many of these nations.

* Protecting Privacy. As retailers continue to store consumer data to further focus their targeted marketing efforts, they are becoming increasingly wary to rising risk in the area of privacy. Some well publicized security breaches in 2007 (such as TJX) have driven this point home, as 40 percent of the retailers cited consumer data security breach as a risk factor, up from 26 percent last year. Further, within that factor, some companies listed employee and corporate information leaks as a growing issue.

* Regulatory Reflux. Half (52%) of the top 100 retailers declared that changes in federal, state and local regulations may impact their bottom line. Some reports specifically cited the new FIN 48 accounting rules that require businesses to report any uncertain tax positions in their financial statements. Also, a third (36%) of the retailers stated that accounting standards presented risk, up from 32 percent last year. This is likely due to increased concerns over IFRS, GAAP and other compliance regulations.

* Foreign Exchange Rates Debut. While only 18 percent of retailers ranked foreign exchange rates as a concern, last year currency risk was not included in the top 20 risk factors at all. Clearly, the lower value of the U.S. dollar has spurred an increased concern among retailers who purchase inventory from foreign suppliers. Most noted was the Euro-U.S. dollar exchange rate, which has squeezed margins for retailers with European suppliers. Further, as emerging nations experience inflation in production costs, they have difficulty not passing it along to their US retail customers. Finally, since most US retailers don't have many foreign retail stores, they do not experience the currency exchange benefits that some other US multinationals are seeing.

BDO Seidman, LLP has been a valued business advisor to retail and consumer product companies for almost 100 years. The firm works with a wide variety of retail clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on a myriad of accounting, tax and other financial issues.

About BDO Seidman, LLP

BDO Seidman, LLP is a national professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. Guided by core values including, competence, honesty and integrity, professionalism, dedication, responsibility and accountability for almost 100 years, we have provided quality service and leadership through the active involvement of our most experienced and committed professionals. BDO Seidman serves clients through 35 offices and more than 300 independent alliance firm locations nationwide. As a Member Firm of BDO International, BDO Seidman, LLP serves multi-national clients by leveraging a global network of resources comprised of 621 Member Firm offices in 110 countries. BDO International is a worldwide network of public accounting firms, called BDO Member Firms, serving international clients. Each BDO Member Firm is an independent legal entity in its own country.

Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test.

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On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format.

Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today.

Monthly Operating Reports are summarized in every Saturday edition of the TCR.

For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852.

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